# Energy Conservation Program: Energy Conservation Standards for Commercial Clothes Washers > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2014-04407 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** March 4, 2014 - **Citation:** 79 FR 12302 ## Text DEPARTMENT OF ENERGY 10 CFR Part 431 [Docket No. EERE-2012-STD-0020] RIN 1904-AC77 Energy Conservation Program: Energy Conservation Standards for Commercial Clothes Washers AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking (NOPR) and public meeting. SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as amended, prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including commercial clothes washers. EPCA also requires the U.S. Department of Energy (DOE) to determine whether amended standards would be technologically feasible and economically justified, and would save a significant amount of energy. In this notice, DOE proposes to amend the energy conservation standards for commercial clothes washers. The notice also announces a public meeting to receive comment on these proposed standards and associated analyses and results. DATES: DOE will hold a public meeting on Monday, April 21, 2014 from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be broadcast as a webinar. See section VII Public Participation for webinar registration information, participant instructions, and information about the capabilities available to webinar participants. DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) before and after the public meeting, but no later than May 5, 2014. See section VII Public Participation for details. ADDRESSES: The public meeting will be held at the U.S. Department of Energy, Forrestal Building, Room 8E-086, 1000 Independence Avenue SW., Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at (202) 586-2945. Please note that foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. Any foreign national wishing to participate in the meeting should advise DOE as soon as possible by contacting Ms. Edwards to initiate the necessary procedures. Please also note that those wishing to bring laptops into the Forrestal Building will be required to obtain a property pass. Visitors should avoid bringing laptops, or allow an extra 45 minutes. Persons can attend the public meeting via webinar. For more information, refer to the Public Participation section near the end of this notice. Any comments submitted must identify the NOPR for Energy Conservation Standards for commercial clothes washers, and provide docket number EERE-2012-STD-0020 and/or regulatory information number (RIN) number 1904-AC77. Comments may be submitted using any of the following methods: 1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments. 2. Email: CommClothesWashers-2012-STD-0020@ee.doe.gov. Include the docket number and/or RIN in the subject line of the message. 3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a CD. It is not necessary to include printed copies. 4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies. Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to Office of Energy Efficiency and Renewable Energy through the methods listed above and by email to Chad_S_Whiteman@omb.eop.gov. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document (Public Participation). Docket: The docket, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at regulations.gov. The docket for this rulemaking can be accessed by searching for the docket at http://www.regulations.gov/#!docketDetail;D=EERE-2012-BT-STD-0020 and/or Docket No. EERE-2012-BT-STD-0020 at the regulations.gov Web site. All documents in the docket are listed in the regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available. The regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact Ms. Brenda Edwards at (202) 586-2945 or by email: Brenda.Edwards@ee.doe.gov. FOR FURTHER INFORMATION CONTACT: Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202)-586-2192. Email: commercial_clothes_washers@ee.doe.gov. Ms. Elizabeth Kohl, U.S. Department of Energy, Office of the General Counsel, Mailstop GC-71, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-7796. Email: Elizabeth.Kohl@hq.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Summary of the Proposed Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits II. Introduction A. Authority B. Background 1. Current Standards 2. History of Standards Rulemaking for Commercial Clothes Washers III. General Discussion A. General Rulemaking Issues B. Product Classes and Scope of Coverage 1. Product Classes C. Test Procedures 1. Appendix J2 2. Energy Metric 3. Water Metric D. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels E. Energy Savings 1. Determination of Savings 2. Significance of Savings F. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Consumers b. Savings in Operating Costs Compared to Increase in Price c. Energy Savings d. Lessening of Utility of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Market Assessment 2. Technology Assessment B. Screening Analysis C. Engineering Analysis 1. General Approach 2. Appendix J2 Efficiency Level Translations 3. Baseline Efficiency Levels 4. Front-Loading Higher Efficiency Levels 5. Top-Loading Higher Efficiency Levels 6. Impacts on Cleaning Performance D. Markups Analysis E. Energy and Water Use Analysis F. Life-Cycle Cost and Payback Period Analysis 1. Equipment Costs 2. Installation Costs 3. Unit Energy Consumption 4. Energy and Water Prices 5. Repair and Maintenance Costs 6. Lifetime 7. Discount Rate 8. Base Case Efficiency Distribution 9. Compliance Date 10. Payback Period Inputs 11. Rebuttable-Presumption Payback Period G. Shipments Analysis 1. Shipments by Market Segment H. National Impact Analysis 1. Efficiency Trends 2. National Energy and Water Savings 3. Net Present Value of Customer Benefit a. Total Annual Installed Cost b. Total Annual Operating Cost Savings I. Customer Subgroup Analysis J. Manufacturer Impact Analysis 1. Overview 2. Government Regulatory Impact Model a. Government Regulatory Impact Model Key Inputs b. Government Regulatory Impact Model Scenarios 3. Discussion of Comments 4. Manufacturer Interviews a. Impacts to Cleaning Performance b. Consumer Behavior c. Disproportionate Impacts d. Market Model Challenges K. Emissions Analysis L. Monetizing Carbon Dioxide and Other Emissions Impacts 1. Social Cost of Carbon 2. Valuation of Other Emissions Reductions M. Utility Impact Analysis N. Employment Impact Analysis V. Analytical Results A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Customers a. Life-Cycle Cost and Payback Period b. Customer Subgroup Analysis c. Rebuttable Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash-Flow Analysis Results b. Impacts on Direct Employment c. Impacts on Manufacturing Capacity d. Impacts on Subgroups of Manufacturers e. Cumulative Regulatory Burden 3. National Impact Analysis a. Significance of Energy Savings b. Net Present Value of Customer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility 5. Impact of Any Lessening of Competition 6. Need of the Nation to Conserve Energy 7. Summary of National Economic Impacts 8. Other Factors C. Proposed Standards 1. Benefits and Burdens of Trial Standard Levels Considered for Front-Loading and Top-Loading Commercial Clothes Washers 2. Summary of Benefits and Costs (Annualized) of the Proposed Standards VI. Procedural Issues and Regulatory Review A. Review Under Executive Orders 12866 and 13563 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under the Information Quality Bulletin for Peer Review VII. Public Participation A. Attendance at the Public Meeting B. Procedure for Submitting Prepared General Statements For Distribution C. Conduct of the Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Summary of the Proposed Rule Title III of the Energy Policy and Conservation Act of 1975 (42 U.S.C. 6291, et seq; “EPCA”), Public Law 94-163, sets forth a variety of provisions designed to improve energy efficiency. (All references to EPCA refer to the statute as amended through the American Energy Manufacturing Technical Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012)). Part C of title III, which for editorial reasons was re-designated as Part A-1 upon incorporation into the U.S. Code (42 U.S.C. 6311-6317, as codified), establishes the “Energy Conservation Program for Certain Industrial Equipment.” These include commercial clothes washers (CCW), the subject of today's notice. (42 U.S.C. 6311(1)(H)). Pursuant to EPCA, any new or amended energy conservation standard 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) and 6316(a)). Furthermore, the new or amended standard must result in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B) and 6316(a)). In accordance with these and other statutory provisions discussed in this notice, DOE proposes amended energy conservation standards for commercial clothes washers. The proposed standards, which are expressed for each product class in terms of a minimum modified energy factor (MEF J2 ) 1 and a maximum integrated water factor (IWF), are shown in Table I.1. These proposed standards, if adopted, would apply to all products listed in Table I.1 and manufactured in, or imported into, the United States on or after the date three years after the publication of the final rule for this rulemaking. 1 DOE proposes to use the “MEF J2 ” metric to distinguish these new standards from the MEF metric on which the current energy conservation standards are based. MEF is calculated according to the test procedures at 10 CFR part 430, subpart B, appendix J1; whereas MEF J2 is defined in 10 CFR 431.154(b)(1) and is equivalent to the MEF calculation in 10 CFR part 430, subpart B, appendix J2. See Section III.C for a comparison of the current standards, measured using appendix J1, with these proposed standards measured using the same appendix. The proposed standards comply with 42 U.S.C. 6295(o)(1). Table I.1—Proposed Energy Conservation Standards for Commercial Clothes Washers Product class Minimum MEF J2 * Maximum IWF † Top-Loading 1.35 8.8 Front-Loading 2.00 4.1 * MEF J2 (appendix J2 modified energy factor) is calculated as the clothes container capacity in cubic feet divided by the sum, expressed in kilowatt-hours (kWh), of: (1) the total weighted per-cycle hot water energy consumption; (2) the total weighted per-cycle machine electrical energy consumption; and (3) the per-cycle energy consumption for removing moisture from a test load. † IWF (integrated water factor) is calculated as the sum, expressed in gallons per cycle, of the total weighted per-cycle water consumption for all wash cycles divided by the clothes container capacity in cubic feet. A. Benefits and Costs to Consumers Table I.2 presents DOE's evaluation of the economic impacts of the proposed standards on consumers of commercial clothes washers, as measured by the average life-cycle cost (LCC) savings and the median payback period. The average LCC savings are positive for all product classes for which consumers are impacted by the proposed standards. The PBPs reflect the very small incremental cost necessary to achieve the proposed standards. Table I.2—Impacts of Proposed Standards on Consumers of Commercial Clothes Washers: Multi-Family Application Product class Average LCC savings (2012$) Median payback period (years) Front-Loading $285 0.02 Top-Loading $259 0.00 Table I.3—Impacts of Proposed Standards on Consumers of Commercial Clothes Washers: Laundromat Application Product class Average LCC savings (2012$) Median payback period (years) Front-Loading $235 0.01 Top-Loading $145 0.00 B. Impact on Manufacturers The industry net present value (INPV) is the sum of the discounted cash flows to the industry from the base year through the end of the analysis period (2014 to 2047). Using a real discount rate of 8.6 percent, DOE estimates that the industry net present value (INPV) for manufacturers of commercial clothes washers is $124.2 million in 2012$. Under the proposed standards, DOE expects that manufacturers may lose up to 4.9 percent of their INPV, which is approximately $6.0 million in 2012$. Additionally, based on DOE's interviews with the manufacturers of commercial clothes washers, DOE does not expect any plant closings or significant loss of employment as a result of today's standards. C. National Benefits 2 2 All monetary values in this section are expressed in 2012 dollars and are discounted to 2013. DOE's analyses indicate that the proposed standards would save a significant amount of energy. The lifetime savings for front-loading and top-loading commercial clothes washers purchased in the 30-year period that begins in the year of compliance with amended standards (2018-2047) amount to 0.11 quads. This is equivalent to 0.6% percent of total U.S. commercial energy use in 2012. The cumulative net present value (NPV) of total consumer costs and savings of the proposed standards for front-loading and top-loading commercial clothes washers ranges from $405 million (at a 7-percent discount rate) to $938 million (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product costs for products purchased in 2018-2047. In addition, the proposed standards would have significant environmental benefits. The energy savings would result in cumulative emission reductions of 5.9 million metric tons (Mt) 3 of carbon dioxide (CO 2 ), 50.1 thousand tons of methane, 4.4 thousand tons of sulfur dioxide (SO 2 ), 9.1 thousand tons of nitrogen oxides (NO X ) and 0.01 tons of mercury (Hg). 4 3 A metric ton is equivalent to 1.1 short tons. Results for NO X and Hg are presented in short tons. 4 DOE calculated emissions reductions relative to the Annual Energy Outlook (AEO) 2013 Reference case, which generally represents current legislation and environmental regulations for which implementing regulations were available as of December 31, 2012. The value of the CO 2 reductions is calculated using a range of values per metric ton of CO 2 (otherwise known as the Social Cost of Carbon, or SCC) developed by an interagency process. The derivation of the SCC values is discussed in section IV.M. Using discount rates appropriate for each set of SCC values, DOE estimates the present monetary value of the CO 2 emissions reduction is between $0.04 billion and $0.56 billion. DOE also estimates the present monetary value of the NO X emissions reduction, is $4.9 million at a 7-percent discount rate and $11.4 million at a 3-percent discount rate. 5 5 DOE is currently investigating valuation of avoided Hg and SO 2 emissions. Table I.4 summarizes the national economic costs and benefits expected to result from the proposed standards for commercial clothes washers. Table I.4—Summary of National Economic Benefits and Costs of Proposed Energy Conservation Standards for Front-Loading and Top-Loading CCW * Category Present value billion 2012$ Discount rate (percent) Benefits Operating Cost Savings 0.405 7 0.938 3 CO 2 Reduction Monetized Value ($11.8/t case) ** 0.04 5 CO 2 Reduction Monetized Value ($39.7/t case) ** 0.18 3 CO 2 Reduction Monetized Value ($61.2/t case) ** 0.29 2.5 CO 2 Reduction Monetized Value ($117/t case) ** 0.56 3 NO X Reduction Monetized Value (at $2,639/ton) ** 0.0049 7 0.0114 3 Total benefits † 0.59 7 1.13 3 Costs Incremental Installed Costs 0.0 7 0.0 3 Total Net Benefits Including Emissions Reduction Monetized Value† 0.59 7 1.13 3 * This table presents the costs and benefits associated with front-loading and top-loading CCW units shipped in 2018-2047. These results include benefits to consumers which accrue after 2047 from the products purchased in 2018-2047. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. ** The CO 2 values represent global monetized values of the SCC, in 2012$, in 2018 under several scenarios of the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value for NO X is the average of the low and high values used in DOE's analysis. † Total Benefits for both the 3% and 7% cases are derived using the series corresponding to average SCC with 3-percent discount rate. The benefits and costs of today's proposed standards, for products sold in 2018-2047, can also be expressed in terms of annualized values. The annualized monetary values are the sum of (1) the annualized national economic value of the benefits from consumer operation of products that meet the proposed standards (consisting primarily of operating cost savings from using less energy, minus increases in equipment purchase and installation costs, which is another way of representing consumer NPV), and (2) the annualized monetary value of the benefits of emission reductions, including CO 2 emission reductions. 6 6 DOE used a two-step calculation process to convert the time-series of costs and benefits into annualized values. First, DOE calculated a present value in 2013, the year used for discounting the NPV of total consumer costs and savings, for the time-series of costs and benefits using discount rates of three and seven percent for all costs and benefits except for the value of CO 2 reductions. For the latter, DOE used a range of discount rates, as shown in Table I.4. From the present value, DOE then calculated the fixed annual payment over a 30-year period (2018 through 2047) that yields the same present value. The fixed annual payment is the annualized value. Although DOE calculated annualized values, this does not imply that the time-series of cost and benefits from which the annualized values were determined is a steady stream of payments. Although combining the values of operating savings and CO 2 emission reductions provides a useful perspective, two issues should be considered. First, the national operating savings are domestic U.S. consumer monetary savings that occur as a result of market transactions while the value of CO 2 reductions is based on a global value. Second, the assessments of operating cost savings and CO 2 savings are performed with different methods that use different time frames for analysis. The national operating cost savings is measured for the lifetime of commercial clothes washers shipped in 2018-2047. The SCC values, on the other hand, reflect the present value of some future climate-related impacts resulting from the emission of one ton of carbon dioxide in each year. These impacts continue well beyond 2100. Estimates of annualized benefits and costs of the proposed standards are shown in Table I.5. The results under the primary estimate are as follows. Using a 7-percent discount rate for benefits and costs other than CO 2 reduction, for which DOE used a 3-percent discount rate along with the average SCC series that uses a 3-percent discount rate, the cost of the standards proposed in today's rule is $0.02 million per year in increased equipment costs, while the benefits are $31 million per year in reduced equipment operating costs, $9 million in CO 2 reductions, and $0.37 million in reduced NO X emissions. In this case, the net benefit amounts to $40 million per year. Using a 3-percent discount rate for all benefits and costs and the average SCC series, the cost of the standards proposed in today's rule is $0.02 million per year in increased equipment costs, while the benefits are $46 million per year in reduced operating costs, $9 million in CO 2 reductions, and $0.57 million in reduced NO X emissions. In this case, the net benefit amounts to $56 million per year. Table I.5—Annualized Benefits and Costs of Proposed Energy Conservation Standards for Commercial Clothes Washers Discount rate Primary estimate * Low net benefits estimate * High net benefits estimate * million 2012$/year Benefits Operating Cost Savings 7% 31 27 38. 3% 46 40 60. CO 2 Reduction Monetized Value ($11.8/t case)* 5% 2 2 3. CO 2 Reduction Monetized Value ($39.7/t case)* 3% 9 8 11. CO 2 Reduction Monetized Value ($61.2/t case) * 2.5% 13 12 17. CO 2 Reduction Monetized Value ($117/t case) * 3% 28 25 34. NO X Reduction Monetized Value (at $2,639/ton) ** 7% 0.37 0.33 0.45. 3% 0.57 0.51 0.70. Total Benefits † 7% plus CO 2 range 33 to 58 29 to 52 42 to 73. 7% 40 35 50. 3% plus CO 2 range 49 to 75 43 to 66 64 to 95. 3% 56 49 72. Costs Incremental Product Costs 7% 0.02 0.02 0.02 3% 0.02 0.03 0.02 Net Benefits Total† 7% plus CO 2 range 33 to 58 29 to 52 42 to 73. 7% 40 35 50. 3% plus CO 2 range 49 to 75 43 to 66 64 to 95. 3% 56 49 72. * This table presents the annualized costs and benefits associated with commercial clothes washer equipment shipped in 2018-2047. These results include benefits to consumers which accrue after 2047 from the products purchased in 2018-2047. The results account for the incremental variable and fixed costs incurred by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices from the AEO2013 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental product costs reflect a flat rate for projected product price trends in the Primary Estimate, a low decline rate for projected product price trends in the Low Benefits Estimate, and a high decline rate for projected product price trends in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV. ** The CO 2 values represent global monetized values of the SCC, in 2012$, in 2015 under several scenarios of the updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor. The value for NO X is the average of the low and high values used in DOE's analysis. † Total Ben efits for both the 3-percent and 7-percent cases are derived using the series corresponding to average SCC with 3-percent discount rate. In the rows labeled “7% plus CO 2 range” and “3% plus CO 2 range,” the operating cost and NO X benefits are calculated using the labeled discount rate, and those values are added to the full range of CO 2 values. DOE has tentatively concluded that the proposed standards represent the maximum improvement in energy efficiency that is technologically feasible and economically justified, and would result in the significant conservation of energy. DOE further notes that products achieving these standard levels are already commercially available for the product classes covered by today's proposal. Based on the analyses described above, DOE has tentatively concluded that the benefits of the proposed standards to the nation (energy savings, positive NPV of consumer benefits, consumer LCC savings, and emission reductions) would outweigh the burdens (loss of INPV for manufacturers and LCC increases for some consumers). DOE also considered higher energy efficiency levels as a trial standard level, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the higher energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this notice and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this notice that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part. II. Introduction The following section discusses the statutory authority underlying today's proposal, as well as some of the relevant historical background related to the establishment of standards for commercial clothes washers. A. Authority As noted in section I, Title III of EPCA establishes the “Energy Conservation Program for Certain Industrial Equipment.” This equipment includes commercial clothes washers, the subject of this rulemaking. (42 U.S.C. 6311(1)(H)). EPCA established energy conservation standards for commercial clothes washers and directed DOE to conduct two rulemakings to determine whether the established standards should be amended. (42 U.S.C. 6313(e)) DOE published its first final rule amending commercial clothes washer standards on January 8, 2010 (“January 2010 final rule”), which apply to commercial clothes washers manufactured on or after January 8, 2013. The second final rule determining whether standards should be amended must be published by January 1, 2015. Any amended standards would apply to commercial clothes washers manufactured three years after the date on which the final amended standard is published. (42 U.S.C. 6313(e)(2)(B)) This current rulemaking will satisfy the requirement to publish the second final rule by January 1, 2015. Pursuant to EPCA, DOE's energy conservation program for covered products consists essentially of four parts: (1) Testing; (2) labeling; (3) the establishment of Federal energy conservation standards; and (4) certification and enforcement procedures. Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6314(a)(2)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA and when making representations to the public regarding the energy use or efficiency of those products. (42 U.S.C. 6314(d)) Similarly, DOE must use these test procedures to determine whether the products comply with standards adopted pursuant to EPCA. The DOE test procedures for commercial clothes washers is codified at title 10 of the Code of Federal Regulations (CFR) part 430, subpart B, appendix J1 (hereafter, “appendix J1”). On March 7, 2012, DOE published a final rule amending its test procedures for clothes washers (“March 2012 final rule”). (77 FR 13888) The March 2012 final rule included minor amendments to appendix J1 and also established a new test procedure at appendix J2 (hereafter, “appendix J2”). Beginning March 7, 2015, manufacturers of commercial clothes washers may use either appendix J1 or appendix J2 to demonstrate compliance with the current standards established by the January 2010 final rule. Manufacturers using appendix J2 would be required to use conversion equations to translate the measured efficiency metrics into equivalent appendix J1 values, as proposed in a separate commercial clothes washer test procedure NOPR published February 11, 2014. (79 FR 8112) 7 The use of appendix J2 would be required to demonstrate compliance with any amended energy conservation standards established as a result of this rulemaking, and the conversion equations would no longer be used at that time. 7 Additional details regarding the commercial clothes washer test procedure NOPR are available at DOE's rulemaking Web page: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=86 . All rulemaking documents are also available at www.regulations.gov , under Docket # EERE-2013-BT-TP-0002. DOE must follow specific statutory criteria for prescribing amended standards for covered products. As indicated above, any amended standard for a covered product 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) and 6316(a)) Furthermore, DOE may not adopt any standard that would not result in the significant conservation of energy. (42 U.S.C. 6295(o)(3) and 6316(a)) Moreover, DOE may not prescribe a standard: (1) for certain products, including commercial clothes washers, if no test procedure has been established for the product, or (2) if DOE determines by rule that the proposed standard is not technologically feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B) and 6316(a)) In deciding whether a proposed standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i) and 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 factors: 1. The economic impact of the standard on manufacturers and consumers of the products subject to the standard; 2. The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the imposition of the standard; 3. The total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard; 4. Any lessening of the utility or the performance of the covered products likely to result from the imposition of 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 imposition of the standard; 6. The need for national energy and water conservation; and 7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII) and 6316(a)) EPCA, as codified, also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6295(o)(1) and 6316(a)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States 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. (42 U.S.C. 6295(o)(4) and 6316(a)) Further, EPCA, as codified, establishes a rebuttable presumption that a standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product complying with an energy conservation standard level will be less than three times the value of the energy savings during the first year that the consumer will receive as a result of the standard, as calculated under the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a)). DOE conducts the analysis required by 6295(o) to determine economic justification and confirm the results of the rebuttable presumption analysis. Additionally, EPCA specifies requirements when promulgating a standard for a type or class of covered product that has two or more subcategories. DOE must specify a different standard level than that which applies generally to such type or class of products for any group of covered products that have the same function or intended use if DOE determines that products within such group (A) consume a different kind of energy from that consumed by other covered products within such type (or class); or (B) have a capacity or other performance-related feature which other products within such type (or class) do not have and such feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1) and 6316(a)). In determining whether a performance-related feature justifies a different standard for a group of products, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE deems appropriate. Any rule prescribing such a standard must include an explanation of the basis on which such higher or lower level was established. (42 U.S.C. 6295(q)(2) and 6316(a)). Federal energy conservation requirements generally supersede State laws or regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c) and 6316(a)) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under 42 U.S.C. 6297(d) and 6316(a)). B. Background 1. Current Standards In a final rule published on January 8, 2010 (“January 2010 final rule”), DOE prescribed the current energy conservation standards for commercial clothes washers manufactured on or after January 8, 2013. The current standards are set forth in Table II.1. Table II.1—Current Federal Energy Efficiency Standards for Commercial Clothes Washers Product class Minimum MEF* cu.ft/kWh/cycle Maximum WF † gal/cu.ft./cycle Top-Loading 1.60 8.5 Front-Loading 2.00 5.5 *MEF (appendix J1 modified energy factor) is calculated as the clothes container capacity in cubic feet divided by the sum, expressed in kilowatt-hours (kWh), of: (1) The total weighted per-cycle hot water energy consumption; (2) the total weighted per-cycle machine electrical energy consumption; and (3) the per-cycle energy consumption for removing moisture from a test load. † WF (water factor) is calculated as the weighted per-cycle water consumption for the cold wash/cold rinse cycle, expressed in gallons per cycle, divided by the clothes container capacity in cubic feet. 2. History of Standards Rulemaking for Commercial Clothes Washers As described in Section II.A, EPCA established energy conservation standards for commercial clothes washers and directed DOE to conduct two rulemakings to determine whether the established standards should be amended. (42 U.S.C. 6313(e)) DOE published its first final rule amending commercial clothes washer standards on January 8, 2010 (“January 2010 final rule”). This current rulemaking will satisfy the requirement to publish the second final rule determining whether the standards should be amended by January 1, 2015. DOE published a notice of public meeting and availability of the framework document for this rulemaking, available at http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0020-0001 (“August 2012 notice”). DOE also requested public comment on the document. 77 FR 48108 (August 13, 2012). The framework document is available at http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0020-0002. The framework document described the procedural and analytical approaches that DOE anticipated using to evaluate energy conservation standards for commercial clothes washers and identified various issues to resolve during the rulemaking. On September 24, 2012, DOE held the framework document public meeting and discussed the issues detailed in the framework document. DOE also described the analyses that it planned to conduct during the rulemaking. Through the public meeting, DOE sought feedback from interested parties on these subjects and provided information regarding the rulemaking process that DOE would follow. Interested parties discussed the following major issues at the public meeting: Rulemaking schedule; test procedure revisions; product classes; technology options; efficiency levels; and approaches for each of the analyses performed by DOE as part of the rulemaking process. DOE considered the comments received since publication of the August 2012 notice, including those received at the September 2012 framework public meeting, in developing today's proposed standards for commercial clothes washers. Following the framework meeting, DOE gathered additional information, held discussions with manufacturers, performed product testing and teardowns, and performed the various analyses described in the framework document, including the engineering, life-cycle cost, payback period, manufacturer impact, and national impact analyses. The results of these analyses are presented in this NOPR. III. General Discussion A. General Rulemaking Issues In the framework document and framework public meeting, DOE discussed using the analyses performed during the previous commercial clothes washer rulemaking in the development of the proposed rule. The Association of Home Appliances Manufacturers (AHAM) commented that the publishing of the framework document on August 13, 2012 was premature given that the amended standards from the January 2010 final rule would not become mandatory until January 8, 2013. AHAM stated that neither DOE nor stakeholders know what the market will look like once compliance with the new standards is required. AHAM further commented that DOE should issue an advance notice of proposed rulemaking (ANOPR) to seek comments after the new standards effective date of January 8, 2013. AHAM believes doing so would allow stakeholders to meaningfully comment on DOE's proposed analysis prior to the notice of proposed rulemaking. AHAM does not feel it is appropriate for DOE to streamline the rulemaking process by not publishing an ANOPR in this case. (AHAM, No. 6 at pp. 1-3; Whirlpool, No. 7 at p. 1) 8 9 Alliance Laundry Systems (ALS) commented that it understands the EPCA statutory requirements for the timeframe that DOE must follow for this rulemaking, but that this rulemaking is premature in asking for information regarding the market assessment before the January 8, 2013 standards take effect. (ALS, No. 16 at p. 2; ALS, Public Meeting Transcript, No. 12 at p. 41) The National Resources Defense Council and Appliance Standards Awareness Project (NRDC and ASAP) commented that DOE should specify the portions of the 2010 rulemaking analysis that will be reused in the current rulemaking, and to what extent data and methodology will be updated. (NRDC and ASAP, No. 11 at p. 2) 8 A notation in this form provides a reference for information that is in the docket for DOE's rulemaking to develop energy conservation standards for commercial clothes washers (Docket No. EERE-2012-BT-STD-0020), which is maintained at www.regulations.gov. This notation indicates that AHAM's statement preceding the reference can be found in document number 6 in the docket, and appears at pages 1-3 of that document. 9 Whirlpool Corporation submitted a written comment stating that it worked closely with AHAM in the development of AHAM's submitted comments, and that Whirlpool supports and echoes the positions taken by AHAM. Throughout this NOPR, reference to AHAM's written comments (document number 6 in the docket) should be considered reflective of Whirlpool's position as well. DOE conducted the market and technology assessment, engineering analysis, and manufacturer impact analysis for today's proposal subsequent to the January 8, 2013 effective date of the current commercial clothes washer standards. The information DOE has gathered through product testing, teardowns, and confidential manufacturer interviews since the framework meeting accurately reflect the state of the commercial clothes washer market following the January 2013 product transitions. B. Product Classes and Scope of Coverage 1. Product Classes EPCA defines a “commercial clothes washer” as a soft-mount front-loading or soft-mount top-loading clothes washer that: (A) Has a clothes container compartment that: (i) for horizontal-axis clothes washers, is not more than 3.5 cubic feet; and (ii) for vertical-axis clothes washers, is not more than 4.0 cubic feet; and (B) is designed for use in: (i) applications in which the occupants of more than one household will be using the clothes washer, such as multi-family housing common areas and coin laundries; or (ii) other commercial applications. (42 U.S.C. 6311(21)) When evaluating and establishing energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justifies a different standard. In making a determination whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility to the consumer of the feature and other factors DOE determines are appropriate. (42 U.S.C. 6295(q) and 6316(a)). Existing energy conservation standards divide commercial clothes washers into two product classes based on the axis of loading: Top-loading and front-loading. For the reasons explained below, DOE maintained these product class distinctions in the framework document and today's proposal. AHAM commented that it supports DOE's proposal to retain the two product classes based on the location of access. AHAM agrees that the longer cycle times of front-loading commercial clothes washers versus cycle times for top-loading commercial clothes washers significantly impact consumer utility. (AHAM, No. 6 at p. 4; AHAM, Public Meeting Transcript, No. 12 at p. 46) ALS commented that it also supports continuing with two separate product classes, top-loading and front-loading. (ALS, No. 16 at p. 2) Pacific Gas and Electric Company, Southern California Gas Company, and San Diego Gas and Electric Company (collectively, the “California Utilities”) commented that DOE should establish one standard that applies to both top-loading and front-loading commercial clothes washers. The California Utilities believe that the method of loading no longer provides unique utility, and thus should not continue to be treated as a unique “feature” warranting separate product classes. Specifically, the California Utilities stated that front-loading clothes washers are now available with cycle times equivalent to top-loading clothes washers, and provided a table listing example cycle times for a selection of top-loading and front-loading residential clothes washer models. In addition, the California Utilities believe that even with a single standard, top-loading commercial clothes washers would still be able to meet such a standard using technologically feasible design considerations. The submitted comment includes a table comparing the top-loading efficiency levels considered by DOE during the most recent energy conservation standards rulemaking for residential clothes washers to the front-loading efficiency levels proposed for consideration in this rulemaking. Furthermore, the California Utilities believe that the technologies, design, and operating characteristics of the residential clothes washer market are transferrable to the commercial clothes washer market. They believe that the split incentive between the purchaser of the equipment (e.g., route operator) and those paying the utility bill (e.g., coin-operated laundry owner) creates a split incentive that has created a barrier for motivating the manufacture and sale of higher-efficiency top-loaders, and that a single standard would correct this market inefficiency. (California Utilities, No. 8 at pp. 2-3) NEEA commented that DOE should reconsider defining a single product class for commercial clothes washers. NEEA stated that in the current market, cycle times are similar for both top-loading and front-loading clothes washers, and as a result, cycle time is no longer a unique utility associated with one method of loading. NEEA also stated that technology to improve the efficiency of top-loading clothes washers has advanced. (NEEA, No. 10 p. 1) NRDC and ASAP commented that DOE should reconsider the division of commercial clothes washers into separate product classes for top-loading and front-loading machines. NRDC stated that the prior determination of cycle times was based largely on a Consumer Reports article on residential clothes washers that contrasted cycle times of 50 to 115 minutes for front-loading clothes washers to 30-85 minutes for top-loading clothes washers. NRDC and ASAP stated that commercial clothes washer manufacturers now offer cycle times on front-loading machines comparable to cycle times on top-loading machines, and provided examples from multiple commercial clothes washer manufacturers. NRDC and ASAP believe that the similarity in cycle times obviates the need for separate product classes. (NRDC and ASAP, No. 11 at pp. 2-3; NRDC, Public Meeting Transcript, No. 12 at pp. 44-46). In response to these comments, DOE notes that in prior rulemakings for residential clothes washers, DOE has concluded that the axis of loading represents a distinct consumer utility-related feature, and, consequently, established separate product classes for top-loading and front-loading residential clothes washers. 56 FR 22263 (May 14, 1991) and 77 FR 32319 (May 31, 2012). DOE has concluded that the same justification applies to commercial clothes washers. As noted by commenters, DOE also determined during the previous energy conservation standards rulemaking for commercial clothes washers that the longer cycle times of front-loading commercial clothes washers versus top-loading clothes washers was likely to significantly impact consumer utility and thereby constituted a performance-related utility under the meaning of 42 U.S.C. 6295(q), which warranted separate product classes. 75 FR 1122, 1130-34. As part of the engineering analysis conducted for the current rulemaking, DOE measured total cycle times on a representative sample of top-loading and front-loading commercial clothes washers during appendix J2 testing, as described fully in chapter 5 of the TSD. Top-loading cycle times for the maximum load size ranged from 29-31 minutes, with an average of 30 minutes. 10 Front-loading cycle times for the maximum load size ranged from 30-37 minutes, with an average of 34 minutes. The longer average cycle time of front-loading machines results in fewer possible “turns” per day compared to top-loading machines, which is more significant in a laundromat or multi-family laundry setting for consumers waiting on the machine to finish its cycle, as well as laundromat owners and multi-family laundry route operators looking to maximize daily laundry throughput. Therefore, although the magnitude of the difference in cycle times for CCWs is smaller than for residential clothes washers, DOE has determined that the longer average cycle time of front-loading machines warrants consideration of separate product classes. 10 This excludes one outlier top-loading model with a cycle time of 50 minutes. In addition, DOE research indicates that the technologies, designs, and operating characteristics of the maximum efficiency top-loading residential clothes washers are not transferrable to commercial clothes washers. The standard level proposed for front-loading commercial clothes washers in this NOPR corresponds closely to the max-tech top-loading level considered by DOE during the residential clothes washer rulemaking. Achieving that level of efficiency in a top-loading machine requires design features such as extra-large capacity, a non-agitator “impeller” wash plate, spin speed greater than 1,000 rpm, and water recirculation. With regards to capacity, DOE notes that a larger clothes container capacity is considered a detriment to commercial clothes washer buyers because a larger capacity tub may result in fewer wash cycles performed by the end-user customer. In competitive markets, coin-operated laundries may not be able to sustain higher vend fares to compensate for the lower number of “turns” per day. In addition, based on discussions with manufacturers, larger tub capacities encourage the over-loading of machines by end-user customers. Regarding the use of non-agitator impeller wash plates, DOE research indicates that this feature also encourages machine overloading in a coin laundry environment, and that this technology is more susceptible to producing poorer wash performance when overloaded compared to a traditional agitator design. Spin speeds greater than 1,000 rpm and water recirculation are also not features that currently exist in the commercial clothes washer market, and DOE research indicates that these features are unlikely to be suitable for commercial clothes washers because of concerns regarding potential impacts on machine reliability as a result of machine overloading or other extreme usage scenarios experienced in a coin-operated laundry environment. Chapter 3 and 4 of the TSD provide a detailed discussion of design options considered for this rulemaking. For these reasons, DOE concludes that separate product classes are justified for top-loading and front-loading commercial clothes washers based on the criteria established in EPCA. (42 U.S.C. 6295(o)(4) and (q)(1), 6316(a)). Today's proposal thus maintains separate standards for top-loading and front-loading product classes. C. Test Procedures 1. Appendix J2 The amended standards proposed in this rulemaking are based on energy and water metrics as measured using appendix J2 of 10 CFR part 430. DOE published a test procedure NOPR on February 11, 2014 (“February 2014 TP NOPR”) proposing to amend its test procedures for commercial clothes washers to add equations for translating MEF and water factor (WF) values as measured using appendix J2 into their equivalent values as measured using appendix J1. 79 FR 8112. These translation equations would be codified at 10 CFR 429.46 and would be used when using the appendix J2 test procedure to demonstrate compliance with the current commercial clothes washer standards established by the January 2010 final rule, which were based on MEF and WF as measured using Appendix J1. These crosswalk equations would not be used to demonstrate compliance with the proposed amended standards in today's NOPR because the proposed amended standard levels are based metrics as measured using the appendix J2 test procedure. Table III.1 shows the equivalent appendix J1 and appendix J2 values for the current energy conservation standards for commercial clothes as set forth at 10 CFR 431.156, and the proposed amended energy conservation standards. As required by section 6295(o) of EPCA, the proposed standards do not increase the maximum allowable energy or water use, or decrease the minimum required energy efficiency, of commercial clothes washers. Table III.1—Current and Proposed Energy Conservation Standards for Commercial Clothes Washers, Equivalent Appendix J1 and J2 Values Product class Minimum energy standards Appendix J1 Current MEF * Proposed MEF * Appendix J2 Current MEF J2 * Proposed MEF J2 * Maximum water standards Appendix J1 Current WF † Proposed WF † Appendix J2 Current IWF ‡ Proposed IWF ‡ Top-Loading 1.60 1.70 1.15 1.35 8.5 8.4 8.9 8.8 Front-Loading 2.00 2.40 1.65 2.00 5.5 4.0 5.2 4.1 * MEF (appendix J1 modified energy factor) and MEF J2 (appendix J2 modified energy factor) are calculated as the clothes container capacity in cubic feet divided by the sum, expressed in kilowatt-hours (kWh), of: (1) the total weighted per-cycle hot water energy consumption; (2) the total weighted per-cycle machine electrical energy consumption; and (3) the per-cycle energy consumption for removing moisture from a test load. † WF (water factor) is calculated as the weighted per-cycle water consumption for the cold wash/cold rinse cycle, expressed in gallons per cycle, divided by the clothes container capacity in cubic feet. ‡ IWF (integrated water factor) is calculated as the weighted per-cycle water consumption for all wash cycles, expressed in gallons per cycle, divided by the clothes container capacity in cubic feet. During the framework meeting and through subsequent written comments, interested parties submitted comments regarding these crosswalk equations and other issues including: • Dryer energy calculations • Water heating calculations • Load size usage factors • Temperature usage factors DOE has addressed these comments related to the test procedure in the February 2014 TP NOPR. (79 FR 8112) 2. Energy Metric The amended energy efficiency standards proposed in this rulemaking are based on the MEF J2 metric. In the framework document, DOE stated it would consider establishing amended energy efficiency standards for commercial clothes washers on the IMEF metric, which would incorporate standby and off mode power. AHAM and ALS commented that they do not oppose new standards for commercial clothes washers based on IMEF; however, DOE should not use the same analysis it used for standby and off mode for residential clothes washers. AHAM and ALS stated that residential and commercial clothes washers have different use patterns, and encouraged DOE to conduct studies on consumer usage to determine the appropriate usage patterns for commercial clothes washers, such as time spent in active mode versus standby mode. AHAM and ALS added that commercial clothes washers are used on a more continuous basis than residential clothes washers, and thus, spend more time in active mode and less time in standby mode compared to residential clothes washers. In addition, AHAM stated that the displays on commercial clothes washers must remain activated longer than residential clothes washer displays so that users know that the commercial machine is available for use. Finally, AHAM suggested that the definition of standby mode should be different for commercial clothes washers than for residential clothes washers. (AHAM, No. 6, at p. 3; AHAM, Public Meeting Transcript, No. 12 at pp. 29-30; ALS, No. 16 at p. 1) The California Utilities support DOE's proposal to develop new standards that take into account standby and off-mode power, stating that they believe such standards would more accurately reflect the total energy consumed by commercial clothes washers. (California Utilities, No. 8 at p. 2) NRDC and ASAP also support establishing new efficiency standards based on the IMEF metric to capture standby and off-mode power. (NRDC and ASAP, No. 11 at p. 2) As part of its market assessment and engineering analysis for this rulemaking, DOE evaluated the standby and off mode power characteristics of a representative sample of commercial clothes washer spanning a wide range of display types, payment systems, and communication features. Although interested parties generally supported establishing new energy standards based on the IMEF metric, DOE is not proposing amended standards for commercial clothes washers based on an integrated energy metric in today's rule. 3. Water Metric The amended water efficiency standards proposed in this rulemaking are based on the IWF metric contained in appendix J2. In the framework document, DOE stated it would consider establishing amended water efficiency standards for commercial clothes washers based on the IWF metric, which incorporates water consumption from all the temperature cycles included as part of the energy test cycle in appendix J2. DOE believes that the IWF metric provides a more representative measure of water consumption than the WF metric. AHAM and ALS stated that they do not oppose DOE's proposal to establish amended water standards based on the IWF metric. ALS added that they already record all the water used by a commercial clothes washer during their DOE tests. (AHAM, No. 6 at p. 3; ALS, No. 16 at p. 1) The Northwest Energy Efficiency Alliance (NEEA) and NRDC and ASAP support establishing new water efficiency standards based on the IWF metric to capture water consumption from all temperature cycles to reflect typical usage patterns by consumers. (NEEA, No. 10 at p. 2; NRDC and ASAP, No. 11 at p. 2) DOE received no comments objecting to the use of the IWF metric. Therefore, for the reasons stated above, the amended water efficiency standards proposed in this rulemaking are based on the IWF metric. D. Technological Feasibility 1. General In each standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that are the subject of the rulemaking. As the first step in such an analysis, DOE develops a list of technology options for consideration in consultation with manufacturers, design engineers, and other interested parties. DOE then determines which of those means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially available products or in working prototypes to be technologically feasible. 10 CFR 430, subpart C, appendix A, section 4(a)(4)(i). For further details on the technology options DOE considered for this rulemaking, see chapter 3 of the NOPR TSD. After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, or service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. Section IV of this notice summarizes the results of DOE's screening analysis, particularly the designs DOE considered, those it screened out, and those that are the basis for the TSLs in this rulemaking. For further details on the screening analysis for this rulemaking, see chapter 4 of the NOPR TSD. 2. Maximum Technologically Feasible Levels When DOE proposes to adopt an amended standard for a type or class of covered product, it must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE determined the maximum technologically feasible (“max-tech”) improvements in energy efficiency for commercial clothes washers using the design parameters for the most efficient products available on the market. The max-tech levels that DOE determined for this rulemaking are described in section IV.C.4 and IV.C.5 of this proposed rule. For further details on the engineering analysis for this rulemaking, see chapter 5 of the NOPR TSD. E. Energy Savings 1. Determination of Savings For each TSL, DOE projected energy savings from the products that are the subject of this rulemaking purchased in the 30-year period that begins in the year of compliance with amended standards (2018-2047). The savings are measured over the entire lifetime of products purchased in the 30-year period. 11 DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the base case. The base case represents a projection of energy consumption in the absence of amended efficiency standards, and considers market forces and policies that affect demand for more efficient products. 11 In previous rulemakings, DOE presented energy savings results for only the 30-year period that begins in the year of compliance. In the calculation of economic impacts, however, DOE considered operating cost savings measured over the entire lifetime of products purchased in the 30-year period. DOE has modified its presentation of national energy savings consistent with the approach used for its national economic analysis. DOE used its national impact analysis (NIA) spreadsheet model to estimate energy savings from amended standards for the products that are the subject of this rulemaking. The NIA spreadsheet model (described in section IV of this notice) calculates energy savings in site energy, which is the energy directly consumed by products at the locations where they are used. For electricity, DOE reports national energy savings in terms of the savings in the energy that is used to generate and transmit the site electricity. To calculate this quantity, DOE derives annual conversion factors from the model used to prepare the Energy Information Administration's (EIA) Annual Energy Outlook ( AEO ). DOE also estimates full-fuel-cycle energy savings in its energy conservation standards rulemakings. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (August 17, 2012). The full-fuel-cycle (FFC) metric includes the energy consumed in extracting, processing, and transporting primary fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy efficiency standards. DOE's approach is based on calculation of an FFC multiplier for each of the energy types used by covered products. For more information on FFC energy savings, see section IV.H.2. 2. Significance of Savings As noted above, 42 U.S.C. 6295(o)(3)(B) prevents DOE from adopting a standard for a covered product unless such standard would result in “significant” energy savings. Although the term “significant” is not defined in the Act, the U.S. Court of Appeals, in Natural Resources Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), indicated that Congress intended “significant” energy savings in this context to be savings that were not “genuinely trivial.” The energy savings for all of the TSLs considered in this rulemaking (presented in section V.C) are nontrivial, and, therefore, DOE considers them “significant” within the meaning of section 325 of EPCA. F. Economic Justification 1. Specific Criteria EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i) and 6316(a)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking. a. Economic Impact on Manufacturers and Consumers In determining the impacts of an amended energy conservation standard on manufacturers, DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include industry net present value (INPV), which values the industry on the basis of expected future cash flows; cash flows by year; changes in revenue and income; and other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers, including impacts on small manufacturers. Third, DOE considers the impact of standards on domestic manufacturer employment and manufacturing capacity, as well as the potential for standards to result in plant closures and loss of capital investment. Finally, DOE takes into account cumulative impacts of various DOE regulations and other regulatory requirements on manufacturers. For individual consumers, measures of economic impact include the changes in LCC and payback period (PBP) associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national net present value of the economic impacts applicable to a particular rulemaking. DOE also evaluates the LCC impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a national standard. b. Savings in Operating Costs Compared to Increase in Price EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product compared to any increase in the price of the covered product that are likely to result from the imposition of the standard. (42 U.S.C. 6295(o)(2)(B)(i)(II) and 6316(a)) DOE conducts this comparison in its LCC and PBP analysis. The LCC is the sum of the purchase price of a product (including its installation) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the product. To account for uncertainty and variability in specific inputs, such as product lifetime and discount rate, DOE uses a distribution of values, with probabilities attached to each value. For its analysis, DOE assumes that consumers will purchase the covered products in the first year of compliance with amended standards. The LCC savings and the PBP for the considered efficiency levels are calculated relative to a base case that reflects projected market trends in the absence of amended standards. DOE identifies the percentage of consumers estimated to receive LCC savings or experience an LCC increase, in addition to the average LCC savings associated with a particular standard level. c. Energy Savings Although significant conservation of energy is a separate statutory requirement for imposing an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III) and 6316(a)) As discussed in section IV, DOE uses the NIA spreadsheet to project national energy savings. d. Lessening of Utility of Products In establishing classes of products, and in evaluating design options and the impact of potential standard levels, DOE evaluates standards that would not lessen the utility of the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV) and 6316(a)) The standards proposed in today's notice will not reduce the utility of the products under consideration in this rulemaking. e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, which is likely to result from the imposition of a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) It also directs the Attorney General to determine the impact, if any, of any lessening of competition likely to result from a proposed standard and to transmit such determination to the Secretary within 60 days of the publication of a proposed rule, together with an analysis of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of today's proposed rule to the Attorney General with a request that the Department of Justice (DOJ) provide its determination on this issue. DOE will address the Attorney General's determination in the final rule. f. Need for National Energy Conservation The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the nation's electricity system. DOE conducts a utility impact analysis to estimate how standards may affect the nation's needed power generation capacity. The proposed standards also are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production. DOE reports the emissions impacts from today's standards, and from each TSL it considered, in section V of this notice. DOE also reports estimates of the economic value of emissions reductions resulting from the considered TSLs. g. Other Factors EPCA allows the Secretary of Energy, in determining whether a standard is economically justified, to consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) DOE did not consider any other factors for today's NOPR. 2. Rebuttable Presumption As set forth in 42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a), EPCA creates a rebuttable presumption that an energy conservation standard is economically justified if the additional cost to the consumer of a product that meets the standard is less than three times the value of the first year's energy savings resulting from the standard, as calculated under the applicable DOE test procedure. DOE's LCC and PBP analyses generate values used to calculate the effects that proposed energy conservation standards would have on the payback period for consumers. These analyses include, but are not limited to, the 3-year payback period contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to consumers, manufacturers, the nation, and the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as the basis for DOE's evaluation of the economic justification for a potential standard level (thereby supporting or rebutting the results of any preliminary determination of economic justification). The rebuttable presumption payback calculation is discussed in section IV of this NOPR. IV. Methodology and Discussion of Related Comments DOE used four analytical tools to estimate the impact of today's proposed standards. The first tool is a spreadsheet that calculates LCCs and PBPs of potential new energy conservation standards. The second tool includes a model that provides shipments forecasts, and a framework in a spreadsheet that calculates national energy savings and net present value resulting from potential amended energy conservation standards. DOE uses the third spreadsheet tool, the Government Regulatory Impact Model (GRIM), to assess manufacturer impacts. Additionally, DOE estimated the impacts of energy conservation standards for CCW on utilities and the environment. DOE used a version of EIA's National Energy Modeling System (NEMS) for the utility and environmental analyses. The NEMS model simulates the energy sector of the U.S. economy. EIA uses NEMS to prepare its Annual Energy Outlook ( AEO), a widely known energy forecast for the United States. The version of NEMS used for appliance standards analysis is called NEMS-BT 12 and is based on the AEO version with minor modifications. 13 The NEMS-BT model accounts for the interactions between the various energy supply and demand sectors and the economy as a whole. 12 BT stands for DOE's Building Technologies Program. 13 The EIA allows the use of the name “NEMS” to describe only an AEO version of the model without any modification to code or data. Because the present analysis entails some minor code modifications and runs the model under various policy scenarios that deviate from AEO assumptions, the name “NEMS-BT” refers to the model as used here. For more information on NEMS, refer to The National Energy Modeling System: An Overview, DOE/EIA-0581 (98) (Feb.1998), available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf . A. Market and Technology Assessment 1. Market Assessment In the framework document, DOE requested information that would contribute to the market assessment for the commercial clothes washers covered in this rulemaking (e.g., current product features and efficiencies, product feature and efficiency trends, and historical product shipments and prices). AHAM provided commercial clothes washer shipment data and shipment-weighted average efficiency data for 2010 and 2011, disaggregated by product class. AHAM also provided market share efficiency data for 2010 and 2011, disaggregated by product class. (AHAM, No. 13 at pp. 2-4) AHAM commented that the timing of its data submittal was too early to be able to provide shipment data for products complying with the new standards that became effective January 8, 2013. (AHAM, No. 8 at pp. 3-4). DOE requests information on historical product shipments and market share efficiency data, disaggregated by product class, for 2012 and 2013 as those data become available. NRDC and ASAP commented that DOE should confirm the split between the coin laundry and multi-family housing sectors of the market, noting that the different operating characteristics of these sub-sectors have significant influence on the life-cycle costs and payback period analysis. (NRDC and ASAP, No. 11 at p. 2) DOE has incorporated the shipments data from AHAM throughout the NOPR analysis. DOE confirmed through discussions with manufacturers that the split between coin laundry and multi-family housing used for the last rulemaking (15 percent and 85 percent, respectively) remains valid for this rulemaking. The NOPR analysis reflects this breakdown. 2. Technology Assessment In the framework document, DOE presented a table of design options it believes represent the most viable options for commercial clothes washers to achieve higher efficiencies. DOE requested comment on whether any of the technologies should be removed from consideration, or whether any other technologies not listed in the table should be considered as technology options. ALS recommended that DOE remove “ozonated laundering” from consideration, because testing ALS has performed on ozone laundering indicates it does not replace the need for heated water and detergent to clean clothes. Therefore, ALS believes ozonated laundry does not improve energy efficiency. (ALS, No. 16 at p. 2) As described in greater detail in Chapter 3 and chapter 4 of the TSD, DOE retained ozonated laundering as a design option because it may improve energy efficiency, but eliminated it from consideration as a result of the screening analysis. The California Utilities recommended that DOE consider all of the design options evaluated in the most recent residential clothes washer standards rulemaking. The commenters believe that all such design options are likely to be applicable and transferrable to commercial clothes washers. (California Utilities, No. 8 at p. 4) As described in the framework document, DOE eliminated from consideration those design options from the prior commercial clothes washer and residential clothes washer rulemakings that DOE has determined would provide negligible, if any, energy savings. DOE also eliminated technologies that it determined were not relevant to the commercial clothes washer market. Chapter 3 and chapter 4 of the TSD provide detailed information regarding DOE's analysis of each design option. NRDC and ASAP suggested that DOE add temperature-differentiated pricing controls to the list of technology options that manufacturers can use to reduce energy consumption in machine operation. The commenters noted that this feature is already being offered by Whirlpool and Alliance Laundry Systems. NRDC and ASAP stated that temperature-differentiated pricing offers launderers the incentive to opt for lower temperature settings than they might otherwise select under undifferentiated pricing. Such controls would allow a machine's owner to pass through a share of the resulting hot water energy savings to the end user, thus incentivizing energy savings. NRDC and ASAP suggested that the test procedure for commercial clothes washers could allow credit for inclusion of such a feature without altering the mechanics of the test procedure itself. (NRDC, Public Meeting Transcript, No. 12 at p. 47-48; NRDC and ASAP, No. 11 at p. 3) Temperature-differentiated pricing offers the potential to incentive energy savings by providing favorable vend pricing for lower-temperature settings. DOE's market analysis confirmed the availability of this feature on multiple clothes washer models from multiple manufacturers. DOE has therefore added temperature-differentiated pricing controls to the list of technology options for consideration. DOE does not have any information, however, regarding the degree to which this feature changes the temperature selection frequencies of end users. Therefore, as described in further detail in Chapter 5 of the TSD, DOE was not able to consider this technology for further evaluation in its engineering analysis. B. Screening Analysis Following the development of the initial list of design options, DOE conducts a screening analysis of each design option based on the following factors: (1) Technological feasibility; (2) practicability to manufacture, install and service; (3) adverse impacts on product utility or product availability; and (4) adverse impacts on health or safety. (10 CFR part 430, subpart C, appendix A, section 4(a)(3) and (4).) DOE did not receive any comments objecting to the proposed design options based on these screening criteria. DOE did, however, receive general comments regarding the impacts of higher efficiency levels on product utility, which DOE addressed as part of its engineering analysis. C. Engineering Analysis 1. General Approach The purpose of the engineering analysis is to characterize the relationship between the incremental manufacturing cost and efficiency improvements of commercial clothes washers. DOE used this cost-efficiency relationship as input to the PBP, LCC, and NES analyses. As proposed in the framework document, DOE conducted the engineering analysis for this rulemaking using the efficiency-level approach supplemented with a design-option approach. Using the efficiency-level approach, DOE examined the aggregated incremental increases in manufacturer selling price at each of the efficiency levels analyzed. DOE also conducted a reverse-engineering analysis, including testing and teardowns of models at each efficiency level, to identify the incremental cost and efficiency improvement associated with each design option or design option combination, supplementing the efficiency-level approach with a design-option approach as needed. Chapter 5 of the TSD contains a detailed discussion of the engineering analysis methodology. ALS commented that it supports DOE's proposal to use an efficiency level approach supplemented by a design option approach as needed. (ALS, No. 16 at p. 4) AHAM commented that it believes DOE erroneously stated in the framework document that it would measure the energy and water consumption of representative units at each efficiency level under consideration using DOE's test procedure at appendix J1. (AHAM, No. 6 at p. 6; AHAM, Public Meeting Transcript, No. 12 at p. 52) DOE intended to reference both appendix J1 and appendix J2 in this instance. DOE performed energy and water consumption testing using both test procedures, which enabled DOE to translate the appendix J1-based efficiency levels into equivalent levels based on appendix J2. DOE used the appendix J2 energy and water consumption data for its engineering analysis and all “downstream” analyses, including the LCC, PBP, and NES. 2. Appendix J2 Efficiency Level Translations In the framework document, DOE proposed baseline and higher efficiency levels based on the current metrics MEF and WF, which are determined according to the appendix J1 test procedure. As discussed in prior sections, DOE has proposed amended standards for commercial clothes washers in terms of MEF J2 and IWF as measured using appendix J2. DOE performed testing on a representative sample of commercial clothes washer models to determine, for each baseline and higher efficiency level considered in the analysis, the equivalent appendix J2 efficiency levels corresponding to each appendix J1 efficiency level. Chapter 5 of the TSD describes the methodology DOE used to perform the translations between appendix J1 MEF/WF values and appendix J2 MEF/IWF values. 3. Baseline Efficiency Levels DOE proposed in the framework document to use the amended energy conservation standards effective January 8, 2013 to characterize the baseline models for both the top-loading and front-loading product classes. ALS commented that it supports using the 2013 minimum efficiency levels as the baseline levels for this rulemaking. (ALS, No. 16 at p. 2) DOE did not receive any comments objecting to the proposed baseline efficiency levels. Therefore, as proposed, DOE used the January 8, 2013 amended energy conservation standards as the baseline efficiency levels for this rulemaking. 4. Front-Loading Higher Efficiency Levels In the framework document, DOE proposed analyzing the higher efficiency levels shown in Table IV.1 for the front-loading product class. The efficiency levels presented in the framework document were based on MEF and WF as measured using appendix J1. Table IV.1 also provides the equivalent levels based on MEF J2 and IWF as measured using appendix J2 test procedure. DOE invited comment on the appropriateness of these front-loading efficiency levels. Table IV.1—Front-Loading Efficiency Levels Level Efficiency level source Appendix J1 metrics MEF WF Appendix J2 metrics MEF J2 IWF Baseline DOE Standard 2.00 5.5 1.65 5.2 1 CEE Tier 2 2.20 4.5 1.80 4.5 2 CEE Tier 3 2.40 4.0 2.00 4.1 3 Maximum Available 2.60 3.7 2.20 3.9 AHAM commented that rinsing performance could become a concern at some of the levels DOE has proposed, noting that every manufacturer would have its own opinion at which level, if any, this would occur. AHAM stated that measuring the impact of the proposed levels on cleaning and rinsing performance may be difficult because currently no test procedures are available to link cleaning and rinsing performance with the energy performance measured in DOE's test procedure. (AHAM, No. 6 at pp. 4-5) ALS commented that it strongly opposes any consideration of higher efficiency levels for front-loading commercial clothes washers. ALS stated that its tests on competitive front-loading products with more stringent efficiency levels have shown that with large load sizes, the clothing in the center of the load does not get wetted by water during the wash portion of the cycle. ALS believes it would not be appropriate for DOE to propose stricter standards that would create this kind of result in a front-loading commercial clothes washer. (ALS, No. 16 at p. 3) The California Utilities suggested that DOE include two additional front-loading efficiency levels corresponding to the top two efficiency levels considered during the most recent residential clothes washer rulemaking: 2.60 MEF/3.8 WF and 2.89 MEF/3.7 WF, as measured using appendix J1. NRDC commented that while DOE proposed the “maximum available” efficiency level in the framework document, DOE did not indicate the maximum efficiency level that is technologically feasible ( i.e., the “max tech” level). (NRDC, Public Meeting Transcript, No. 12 at p. 55) DOE notes that it developed its list of front-loading efficiency levels based on a review of commercial clothes washer products currently on the market. DOE confirmed through its market assessment that products are available for purchase at each of the identified efficiency levels. DOE performed appendix J1 and appendix J2 testing on a representative sample of commercial clothes washer models at each proposed efficiency level. To investigate concerns regarding potential impacts on cleaning performance, rinsing performance, and solid particle removal, DOE performed additional testing on each model using AHAM's HLW-1-2010 test method: Performance Evaluation Procedures for Household Clothes Washers (hereafter, “AHAM HLW-1-2010”). Specifically, DOE performed the soil/stain removal, rinsing effectiveness, and sand removal tests provided in HLW-1-2010. DOE's testing indicated that front-loading commercial clothes washers are available on the market at the proposed amended standard level that provide equivalent washing, rinsing, and solid particle removal as current baseline units. Chapter 5 of the TSD describes these test results in greater detail. Regarding the higher efficiency levels considered in the residential clothes washer rulemaking, DOE notes that the 2.60 MEF/3.8 WF efficiency level suggested by the commenter corresponds closely with the maximum level proposed by DOE, 2.60 MEF/3.7 WF. DOE does not believe that the more stringent level of 2.89 MEF/3.7 WF would be appropriate for consideration in this commercial clothes washer rulemaking. First, no commercial clothes washer models are currently available on the market at that efficiency level. Second, some of the design options that would be required to achieve that efficiency level could negatively wash basket size and cycle time. Most notably, achieving the highest efficiency levels in the front-loading residential clothes washer market requires large-capacity wash baskets greater than 3.9 cubic feet and cycle times of 50 minutes or longer. DOE notes that EPCA's product coverage definition of a front-loading commercial clothes washer specifies a maximum capacity of 3.5 cubic feet, so machines with the larger capacity wash baskets would not be considered covered equipment subject to DOE's energy conservation standards. (42 U.S.C. 6311(21)) In addition, as noted previously, a larger clothes container capacity is considered a detriment to commercial clothes washer owners because a larger capacity wash tub may result in fewer wash cycles performed by the end-user customer. In competitive markets, coin-operated laundries may not be able to sustain higher vend fares to compensate for the lower number of turns per day. Furthermore, cycle times of 50 minutes would constitute a substantial increase over the current 34 minute average cycle time as measured by DOE. Longer cycle times decrease the number of possible turns per day on a given clothes washer, which is more significant in a laundromat or multi-family laundry setting for consumers waiting on the machine to finish its cycle, as well as laundromat owners and multi-family laundry route operators looking to maximize daily laundry throughput. Based on the results of its market and technology assessment and engineering analysis, DOE has tentatively determined that the maximum available efficiency level identified in the framework document represents the maximum efficiency level that is technologically feasible for front-loading commercial clothes washers. 5. Top-Loading Higher Efficiency Levels In the framework document, DOE stated that it was unaware at the time of any top-loading commercial clothes washers that exceeded the January 8, 2013 baseline efficiency level of 1.60 MEF/8.5 WF. Therefore, DOE did not specify any higher efficiency levels for top-loading commercial clothes washers in the framework document. DOE also stated, however, that should manufacturers develop models above the baseline efficiency level, or should working prototypes above the baseline efficiency level become available, DOE would consider incorporating additional efficiency levels in its analysis. Since the publishing of the framework document, DOE has become aware of multiple top-loading clothes washers on the market, from multiple manufacturers, at higher efficiency levels than the baseline level represented by the January 8, 2013 amended standards. Accordingly, DOE analyzed the higher efficiency levels shown in Table IV.2 for the top-loading product class. Table IV.2 shows the efficiency levels in terms of MEF and WF as measured using appendix J1, as well as MEF J2 and IWF as measured using appendix J2. Table IV.2—Top-Loading Efficiency Levels Level Efficiency level source Appendix J1 metrics MEF WF Appendix J2 metrics MEF J2 IWF Baseline DOE Standard 1.60 8.5 1.15 8.9 1 Gap Fill 1.70 8.4 1.35 8.8 3 Maximum Available 1.85 6.9 1.55 6.9 AHAM commented that more efficient standard levels for top-loading commercial clothes washers are not justified, believing that standards more stringent than the current level could create performance concerns. AHAM stated that as hot water and water levels are reduced, cleaning and rinse performance will suffer and may no longer meet consumer expectations at standard levels beyond the January 2013 levels. AHAM also expressed concern that amended standards could require changes in the spin speed, heavier lids, and door locks, and that such changes could negatively impact consumer and end-user utility. AHAM noted, for example, that consumers may find it more difficult to use a clothes washer with a heavier lid or may not be able to add clothing mid-cycle due to door locking. (AHAM, No. 6 at pp. 4-5) ALS opposes any consideration of higher efficiency levels for top-loading commercial clothes washers. At the time of its comment submittal, ALS was not aware of any top-loading products that exceed the January 2013 standard level. ALS stated that not enough time has elapsed to evaluate consumer response or acceptability resulting from deploying new top-loading models at the January 2013 standard level. Accordingly, ALS believes the appropriate max-tech level for top-loading commercial clothes washers is the 2013 DOE minimum standard. ALS stated that it had opposed DOE's decision during the prior rulemaking to establish the amended standard level at the max-tech level, and that it had commented that removing hot water from the wash cycle to achieve the proposed max-tech level would reduce cleaning performance and negatively impact utility. ALS further commented that “hot” water is commonly recognized as 120 degrees Fahrenheit and above; yet, according to ALS, the max-tech model from the prior rulemaking provides 112 degrees wash water, which is commonly recognized as “warm”. ALS believes that further increasing the top-loading standard level would further decrease consumer utility. (ALS, No. 16 at pp. 3-4) The California Utilities suggested that DOE analyze higher efficiency levels for top-loading commercial clothes washers corresponding to the higher efficiency levels that DOE had analyzed during the most recent residential clothes washer rulemaking. The California Utilities recommended levels ranging from 1.72MEF/8.0WF to 2.47MEF/3.6WF at the max-tech level, as measured using appendix J1. (California Utilities, No. 8 at p. 4) NEEA commented that top-loading clothes washer technology has advanced, but that it is not clear that the marketplace has incorporated the newest technologies. NEEA recommended that DOE review the max-tech level for top-loading commercial clothes washers. (NEEA, No. 10 at p. 2) NRDC and ASAP commented that the absence of products on the market at a particular efficiency level above the baseline level does not necessarily mean that efficiency levels above the baseline are not technologically feasible. NRDC and ASAP added that should DOE retain separate product classes for top-loading and front-loading commercial clothes washers, DOE must identify a max-tech level for the top-loading product class, noting that technology options may exist for improving efficiency that have not yet been incorporated into current products. (NRDC and ASAP, No. 11 at p. 4) DOE developed its list of top-loading efficiency levels based on a review of commercial clothes washer products currently on the market. DOE gathered information through product testing and teardowns since the framework meeting that reflect the state of the commercial clothes washer market following the January 2013 product transitions. DOE confirmed through its market assessment that products are available for purchase at each of the identified efficiency levels. DOE performed appendix J1 and appendix J2 testing on a representative sample of top-loading commercial clothes washer models at each proposed efficiency level. To investigate concerns regarding potential impacts on cleaning performance, rinsing performance, and solid particle removal, DOE performed additional testing on each model using AHAM's HLW-1-2010 test method. DOE testing indicated that top-loading commercial clothes washers are available on the market at the proposed amended standard level that provide equivalent washing performance, rinsing performance, and solid particle removal as current baseline units. Chapter 5 of the TSD describes these test results in greater detail. Regarding potential consumer utility impacts associated with door locks, DOE's market analysis indicates that top-loading models without door locks are currently available on the market at the proposed amended standard level. Regarding the higher efficiency levels considered in the residential clothes washer rulemaking, DOE does not believe that the more stringent levels above the identified maximum available level would be appropriate for consideration in this commercial clothes washer rulemaking, for many of the same reasons described previously for the front-loading efficiency levels. First, no commercial clothes washer models are currently available on the market above 1.85MEF/6.9WF, as measured using appendix J1. Second, some of the design options that would be required to achieve those higher efficiency levels could be perceived by the machine owners and/or end users as negatively impacting wash basket size. Most notably, achieving the highest efficiency levels in the residential clothes washer market requires implementing large-capacity wash baskets greater than 4.3 cubic feet. DOE notes that EPCA's product coverage definition of a top-loading commercial clothes washer specifies a maximum capacity of 4.0 cubic feet, so units with the larger-capacity wash baskets would not be covered equipment subject to DOE's energy conservation standards. (42 U.S.C. 6311(21)) In addition, as noted previously, a larger clothes container capacity is considered a detriment to commercial clothes washer owners because a larger-capacity tub may result in fewer wash cycles performed by the end-user customer. Furthermore, the max-tech residential clothes washers lack an agitator and instead use a circular wash plate that requires different loading instructions than clothes washers with traditional agitators. Manufacturers typically instruct users not to load garments directly over the center of the wash plate, so that the center of the wash plate remains visible when loaded. It is unlikely that such specialized loading instructions would be implementable in a commercial laundry environment such that the wash performance of the unit would be maintained. Based on the results of its market and technology assessment and engineering analysis, DOE has determined that the maximum available efficiency level identified in Table IV.2 represents the maximum efficiency level that is technologically feasible for top-loading commercial clothes washers. 6. Impacts on Cleaning Performance As mentioned in the discussion of front-loading and top-loading higher efficiency levels, DOE conducted performance testing to quantitatively evaluate potential impacts on cleaning performance, rinsing performance, and solid particle removal as a result of higher standard levels. As described in greater detail in Chapter 5 of the TSD, DOE tested a representative sample of commercial clothes washers at each efficiency level using AHAM's HLW-1-2010 test procedure. For each clothes washer, DOE tested the maximum load size specified in appendix J2, rounded to the nearest pound, using the warm wash/cold rinse cycle. Manufacturers indicated that the maximum load size is particularly relevant to commercial clothes washer owners and operators because end-users often overload the machines in order to limit their total laundry cost. DOE notes that the warm wash/cold rinse temperature selection has the highest usage factor in appendix J2. The test results indicate that units meeting the proposed new standard levels are capable of providing washing performance, rinsing performance, and solid particle removal results equivalent to current baseline products. ALS commented that no industry test method currently exists for measuring the cleaning performance of commercial clothes washers, nor has the industry agreed upon an acceptable range of performance characteristics. ALS acknowledged AHAM's HLW-1 Performance Evaluation Procedures for Household Clothes Washers, but stated that it may not be fully appropriate for measuring the performance of commercial clothes washers. (ALS, No. 16 at p. 4) DOE consulted with a number of manufacturers who indicated that AHAM HLW-1-2010 would be the most appropriate test method to determine relative cleaning performance across different commercial clothes washer models. DOE recognizes that AHAM HLW-1-2010 is typically used to measure the performance of residential clothes washers, but given the similarities in physical construction, DOE believes the test procedure is appropriate for commercial clothes washers. DOE also acknowledges that the commercial clothes washer industry has not agreed upon acceptable ranges of performance characteristics; therefore, DOE's test results should be used for relative comparison purposes only. D. Markups Analysis The markups analysis develops appropriate markups in the distribution chain to convert the estimates of manufacturer selling price derived in the engineering analysis to customer prices. (“Customer” refers to purchasers of the equipment being regulated.) DOE calculates overall baseline and incremental markups based on the equipment markups at each step in the distribution chain. The incremental markup relates the change in the manufacturer sales price of higher efficiency models (the incremental cost increase) to the change in the customer price. For the three key CCW market segments—laundromats, private multi-family housing, and large institutions—data indicate that an overwhelming majority of commercial clothes washers are sold through either distributors or route operators. For today's NOPR, DOE used two distribution channels used in the 2010 Final Rule—manufacturer to distributor to owner/lessee, and manufacturer to route operator to owner/lessee. For purposes of developing the markups for commercial clothes washers, DOE estimated that the markups and the resulting consumer equipment prices determined for the distribution channel involving distributors would be representative of the prices paid by customers acquiring their equipment from route operators. DOE based the distributor markups for commercial clothes washers on financial data for the sector Machinery, Equipment and Supplies Merchant Wholesalers from the 2007 U.S. Census Business Expenses Survey (BES), which is the most recent available survey. 14 This sector includes the subsector Laundry Machinery, Equipment, and Supplies, Commercial, Merchant Wholesalers, which specifically sells commercial clothes washers. DOE calculated overall baseline and incremental markups based on the equipment markups at the intermediate step in the distribution chain. The incremental markup relates the change in the manufacturer sales price of higher efficiency models (the incremental cost increase) to the change in the customer price. Chapter 6 of the NOPR TSD provides further detail on the estimation of markups. 14 U.S. Census Bureau, Economic Census, Business Expenses Survey, Wholesale Trade, Machinery, Equipment and Supplies Merchant Wholesalers, 2007. (Last accessed February, 2013.) E. Energy and Water Use Analysis The energy and water use analysis provides estimates of the annual energy and water consumption of commercial clothes washer units at the considered efficiency levels. DOE uses these values in the LCC and PBP analyses and in the NIA. DOE developed energy and water consumption estimates for all equipment classes analyzed in the engineering analysis. The analysis seeks to capture the range of CCW use in the field. The framework document outlined DOE's intention to base the energy and water use analysis on the energy and water use per cycle and the number of cycles per year. The test procedure uses a single value for number of cycles, which is based on residential use. For the energy and water use analysis, DOE established an appropriate range of usage specific to CCW in the field. Because the predominant applications of CCWs are in multi-family buildings and laundromats, DOE focused on these two building applications to determine appropriate values for number of CCW cycles per year. NRDC and ASAP commented that DOE should include all major product categories in its analysis for this rulemaking. The commenters noted that “other commercial applications” in the statutory definition of commercial clothes washers include washers used for on-premise laundry. Further, the commenters stated that the on-premise laundry category (such as in the hospitality industry) was largely ignored in the technical analysis for the January 2010 final rule. The commenters added that while the total unit count may be smaller than coin laundries and multi-housing laundry, this subgroup may have distinctive usage factors that will influence total energy and water use for covered commercial clothes washers. (NRDC and ASAP, No. 11 at p. 1) DOE acknowledges that the “other commercial applications” category in the statutory definition would include applications other than coin-operated laundry and multi-family housing laundry. However, DOE is not aware of any data indicating the prevalence of covered products in other applications such on-premise laundries or the hospitality industry. Furthermore, DOE is not aware of any data indicating how the usage patterns of such products would compare to the usage patterns of coin-operated and multi-housing laundries. Therefore, DOE has no information on which to base a separate analysis for on-premise laundry usage. Further, discussions with manufacturers have supported DOE's understanding that applications other than coin-operated laundries and multi-family housing laundries constitute a small minority of installations of covered commercial clothes washers. For these reasons, DOE's analysis for this NOPR focuses on the coin-operated laundry and multi-housing laundry applications, which represent the large majority of commercial clothes washer usage. ALS suggested that DOE seek stakeholder input on new sources for data that can assist in characterizing the cycles per year for CCWs. (ALS, No. 97 at p. 5) DOE included all available studies on CCW usage to establish representative usage. DOE welcomes information on data sources other than those mentioned in today's NOPR. For the NOPR analysis, DOE relied on several research studies to arrive at a range of annual use cycles. The average values are 1,074 and 1,483 for multi-family and laundromat applications, respectively. The data sources that informed these usage numbers include Multi-Housing Laundry Association (MLA) and the Coin Laundry Association (CLA), Southern California Edison, and San Diego Gas and Electric, as well as research sponsored by the MLA and the CLA. Chapter 7 of the NOPR TSD describes these sources in detail. 15 15 DOE did not rely on the Commercial Building Energy Consumption Survey (CBECS) conducted by DOE's Energy Information Administration (EIA) because energy and water consumption is not specified for buildings identified with laundry facilities in the CBECS dataset. To calculate the energy and water use per cycle, DOE used the new Appendix J2 test procedure, as described in the paragraphs that follow. (77 FR 13888, Mar. 7, 2012). Based on the known MEF J2 , IWF, and remaining moisture content (RMC) of the washer, the test procedure provides algorithms to derive energy and water use per cycle. The energy use analysis for today's NOPR consists of three related parts—the machine energy use, the dryer energy use and the water heating energy use. DOE determined the per-cycle machine energy use from the tests results of the considered models, performed using the current DOE test procedure (77 FR 13888, Mar. 7, 2012). DOE determined the per-cycle clothes drying energy use by using remaining moisture content (RMC) values contained in the cost/efficiency data set developed in the engineering analysis. The energy required to remove moisture from clothes, i.e., the dryer energy, is a significant component of total clothes washer energy consumption. The equation used to determine this energy component is as described in the current DOE test procedure. DOE determined the per-cycle water-heating energy use by first determining the total per-cycle energy use (the clothes container volume divided by the MEF J2 ) and then subtracting from it the per-cycle clothes-drying and machine energy. Southern Company noted the importance of water heating energy and dryer energy in the consideration of CCW energy use, and raised concerns about the validity of the parameters specified in the test procedure. Regarding water heating energy, Southern Company stated that the assumed efficiency in the 2010 final rule DOE of 100% for electric water heaters and 75% for gas water heaters was reasonable, but the values should be updated as the weighted average efficiency of installed water heaters changes over time. (Southern, No. 9 at p. 1) DOE research indicates that the efficiency of the stock of commercial water heaters is changing very slowly, so for today's NOPR it used the same efficiencies as in the 2010 final rule. Regarding dryer energy, Southern Company stated that energy use for drying clothes is highly dependent on consumer behavior, and noted that commercial dryers are usually equipped with a timer and do not have moisture sensors. Southern also questioned the value used for variable DEF, the nominal energy required for a clothes dryer to remove moisture from clothes. It stated that the currently used DEF of 0.5 kWh per pound appears to assume perfect operation and efficiency of drying. They recommend DOE consider adjustments to the assumed benefits of reduced clothing moisture for dryer operation. (Southern, No. 9 at p. 2) DOE's current approach for quantifying reduction in dryer energy use from an increase in CCW efficiency is based on the existing test procedure for residential clothes washers. DOE acknowledges that operating conditions for commercial dryers may differ from the conditions of residential dryers, but DOE did not find any data to support changing the dryer energy use calculation. However, in response to comments received, DOE considered a sensitivity in the LCC and PBP analysis in which the reduction in dryer energy use is half of what is assumed in the test procedure. Southern Company also stated that it is aware of a small soon-to-be-completed study conducted by the Electric Power Research Institute that found no measurable savings for high efficiency equipment for direct energy use by residential washers and dryers. (Southern, No. 9 at p. 2) DOE attempted to obtain the study on observed energy savings from washers in the field, but EPRI indicated that the study was available only to EPRI members. Thus, DOE was not able to evaluate the findings. In addition, DOE has concerns regarding both the sample size and the applicability of a study of residential equipment to the commercial equipment that is the subject of this analysis. F. Life-Cycle Cost and Payback Period Analysis The purpose of the LCC and PBP analysis is to analyze the effects of potential amended energy conservation standards on customers of commercial clothes washers by determining how a potential amended standard affects their operating expenses (usually decreased) and their total installed costs (usually increased). The LCC is the total customer expense over the life of the equipment, consisting of equipment and installation costs plus operating costs over the lifetime of the equipment (expenses for energy use, maintenance, and repair). DOE discounts future operating costs to the time of purchase using customer discount rates. The PBP is the estimated amount of time (in years) it takes customers to recover the increased total installed cost (including equipment and installation costs) of a more efficient type of equipment through lower operating costs. DOE calculates the PBP by dividing the change in total installed cost (normally higher) due to a standard by the change in annual operating cost (normally lower) that results from the standard. For any given efficiency level, DOE measures the PBP and the change in LCC relative to an estimate of the base-case efficiency distribution. The base-case estimate reflects the market in the absence of amended energy conservation standards, including the market for equipment that exceeds the current energy conservation standards. DOE typically develops a consumer sample for determining PBPs and LCC impacts. Because EIA's Commercial Building Energy Consumption Survey (CBECS) does not provide the necessary data to develop one for CCWs, DOE established the variability and uncertainty in energy and water use by defining the uncertainty and variability in the use (cycles per day) of the equipment. The variability in energy and water pricing was characterized by regional differences in energy and water prices. DOE expresses the LCC and PBP results as the number of units experiencing economic impacts of different magnitudes. DOE models both the uncertainty and the variability in the inputs to the LCC and PBP analysis using Monte Carlo simulation and probability distributions. 16 As a result, the LCC and PBP results are displayed as distributions of impacts compared to the base case conditions. 16 The Monte Carlo process statistically captures input variability and distribution without testing all possible input combinations. Therefore, while some atypical situations may not be captured in the analysis, DOE believes the analysis captures an adequate range of situations in which small, large, and very large air-cooled commercial package air conditioning and heating equipment operate. DOE conducted LCC and PBP analysis separately for two applications in each of the equipment classes: Laundromats and multi-family buildings. These applications have different usage characteristics. Inputs to the LCC and PBP analysis are categorized as: (1) Inputs for establishing the total installed cost and (2) inputs for calculating the operating expense. The following sections contain brief discussions of comments on the inputs and key assumptions of DOE's LCC and PBP analysis and explain how DOE took these comments into consideration. 1. Equipment Costs To calculate the equipment prices faced by CCW purchasers, DOE multiplied the manufacturing costs developed from the engineering analysis by the supply chain markups it developed (along with sales taxes). For projecting future CCW prices, AHAM stated that DOE should not rely on experience curves for the same reasons that it expressed in comments for the microwave oven rulemaking. (AHAM, No. 19 at p. 5) To develop an equipment price trend for the NOPR, DOE examined the commercial laundry and dry-cleaning machinery PPI for the period 1993-2012. This index, adjusted for inflation, shows a rising trend. However, the inflation adjusted trend for household laundry equipment (which more closely matches CCW units because the considered products in this rulemaking are mostly residential-style units and exclude the larger commercial laundry equipment) shows a long-term declining trend. 17 Given the uncertainty, DOE decided to use a constant price for the default case for CCW units. For the NIA, DOE also analyzed the sensitivity of results to alternative price forecasts. (See section IV.X) 17 2012-04 Direct Final Rule Technical Support Document—Appendix 8-E. Estimation of Equipment Price Trends for Residential Clothes Washers. http://www.regulations.gov/#!documentDetail;D=EERE-2008-BT-STD-0019-0047. In the previous CCW rulemaking, DOE based the LCC analysis on the assumption that any increase in the cost of a more efficient unit that is leased gets passed on to the building owners through the contracting arrangements between route operators and building owners. NRDC recommended that DOE seek information on contracting arrangements between route operators and building owners. (NRDC, No. 12 at p. 81) DOE was unable to obtain information about contracting arrangements between route operators and building owners. The assumption that any increase in the cost of a more efficient unit that is leased gets passed on is consistent with what one would expect in a competitive business environment. To the extent that costs are not passed on, the LCC savings for building owners from higher-efficiency CCWs would be larger than indicated in today's NOPR. 2. Installation Costs Installation costs include labor, overhead, and any miscellaneous materials and parts. For today's NOPR, DOE used data from the RS Means Mechanical Cost Data, 2013 on labor requirements to estimate installation costs for CCWs. DOE estimates that installation costs do not increase with equipment efficiency. 3. Unit Energy Consumption The calculation of annual per-unit energy consumption at each considered efficiency level is described above in section IV.E. 4. Energy and Water Prices DOE used commercial sector energy and water prices for both multi-family and laundromat applications. DOE assumes that common area laundry facilities are mainly found in large multi-family buildings that receive commercial energy and water rates. a. Energy Prices DOE derived average electricity and natural gas prices for 27 geographic areas. DOE estimated commercial electricity prices for each of the 27 states and group of states based on 2012 data from EIA Form 861, Annual Electric Power Industry Report. 18 DOE first estimated an average commercial price for each utility, and then calculated an average price for each area by weighting each utility with customers in an area by the number of commercial customers served in that area. 18 http://www.eia.gov/electricity/data/eia861/. DOE estimated average commercial natural gas prices in each of the 27 geographic areas based on 2012 data from the EIA publication Natural Gas Monthly. 19 DOE calculated an average natural gas price for each area by first calculating the average prices for each state, and then calculating a regional price by weighting each state in a region by its population. 19 http://www.eia.gov/naturalgas/monthly/. To estimate the trends in electricity and natural gas prices, DOE used the price forecasts in AEO 2013. To arrive at prices in future years, DOE multiplied the average prices described above by the forecast of annual average changes in national-average commercial electricity and natural gas prices. Because the AEO forecasts prices only to 2040, DOE used the average rate of change during 2025-2040 to estimate the price trends beyond 2040. The spreadsheet tools used to conduct the LCC and PBP analysis allow users to select either the AEO's high-growth case or low-growth case price forecasts to estimate the sensitivity of the LCC and PBP to different energy price forecasts. b. Water and Wastewater Prices DOE obtained commercial water and wastewater price data from the Water and Wastewater Rate Survey conducted by Raftelis Financial Consultants (RFC) and the American Water Works Association (AWWA). 20 NRDC and ASAP suggested that DOE use the most recent AWWA/Raftelis survey for calculating water and wastewater prices. (NRDC, No. 11 at p. 4) DOE obtained the water and wastewater price data from the 2012 Water and Wastewater Rate Survey, the most recent survey conducted by RFC and AWWA. The survey covers approximately 290 water utilities and 214 wastewater utilities from 44 states and the District of Columbia, with water and wastewater utilities analyzed separately. The samples that DOE obtained of the water and waste water utilities are not large enough to calculate regional prices for all 27 states and group of states. Hence, DOE calculated average values at the Census region level (Northeast, South, Midwest, and West) by weighting each state in a region by its population. 20 Raftelis Financial Consultants, Inc. 2012 RFC/AWWA Water and Wastewater Rate Survey. 2013. Charlotte, NC, Kansas City, MO, and Pasadena, CA. www.raftelis.com/ratessurvey.html. To estimate the future trend for water and wastewater prices, DOE used data on the historic trend in the national water price index (U.S. city average) provided by the Bureau of Labor Statistics (BLS), adjusted for inflation. Generally, DOE extrapolated a future trend based on the linear growth from 1970 to 2012. However, using the linear fit would have resulted in a price decline in the near-term, which does not seem plausible because historically, water prices have not declined in the country. Therefore, rather than use the extrapolated trend to forecast the near-term trend after 2012, DOE pinned the annual price to the value in 2012 until 2020. Beyond 2020, DOE used the extrapolated trend to forecast prices out to 2047. 5. Repair and Maintenance Costs Repair costs are associated with repairing or replacing components that have failed in the appliance; maintenance costs are associated with maintaining the operation of the equipment. For the January 2010 Final Rule, DOE included increased repair costs for higher efficiency CCWs based on an algorithm developed by DOE for central air conditioners and heat. This algorithm calculates annualized repair and maintenance costs by dividing half of the equipment retail price over the equipment lifetime. DOE requested industry input to estimate changes in repair and maintenance costs with an increase in efficiency of CCW units. AHAM stated that higher efficiency levels could impact the maintenance and repair costs for CCW units. (AHAM, No. 6 at p. 5) Sin [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2014-04407. Public record. Not legal advice.