# Energy Conservation Program: Energy Conservation Standards for Commercial Water Heating Equipment > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2022-10011 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** May 19, 2022 - **Citation:** 87 FR 30610 ## Text DEPARTMENT OF ENERGY 10 CFR Part 431 [EERE-2021-BT-STD-0027] RIN 1904-AD34 Energy Conservation Program: Energy Conservation Standards for Commercial Water Heating Equipment AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Notice of proposed rulemaking and announcement of public meeting. SUMMARY: The Energy Policy and Conservation Act, as amended (“EPCA”), prescribes energy conservation standards for certain commercial and industrial equipment, including commercial water heaters, hot water supply boilers, and unfired hot water storage tanks (hereinafter referred to as “commercial water heating (CWH) equipment”). EPCA requires the U.S. Department of Energy (“DOE”) to periodically determine whether more-stringent standards for CWH equipment would be technologically feasible and economically justified, and would result in significant energy savings. In this notice of proposed rulemaking (“NOPR”), DOE proposes to amend the standards for certain classes of CWH equipment for which DOE has tentatively determined there is clear and convincing evidence to support more-stringent standards. Additionally, DOE is proposing to codify standards for electric instantaneous CWH equipment from EPCA into the Code of Federal Regulations (“CFR”). DOE also announces a public meeting to receive comment on these proposed standards and the associated analyses and results. DATES: Comments: DOE will accept comments, data, and information regarding this NOPR no later than July 18, 2022. Comments regarding the likely competitive impact of the proposed standard should be sent to the Department of Justice contact listed in the ADDRESSES section on or before July 18, 2022. Meeting: DOE will hold a public meeting via webinar on June 23, 2022, from 1:00 p.m. to 5:00 p.m. See section VII, “Public Participation,” for webinar registration information, participant instructions and information about the capabilities available to webinar participants. ADDRESSES: Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at www.regulations.gov . Follow the instructions for submitting comments. Alternatively, interested persons may submit comments, identified by docket number EERE-2021-BT-STD-0027 and/or regulatory information number (RIN) 1904-AD34, by any of the following methods: (1) Federal eRulemaking Portal: www.regulations.gov . Follow the instructions for submitting comments. (2) Email: Mail to: CommWater Heaters2021STD0027@ee.doe.gov . Include the docket number EERE-2021-BT-STD-0027 in the subject line of the message. No telefacsimiles (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see section VII of this document. Although DOE has routinely accepted public comment submissions through a variety of mechanisms, including the Federal eRulemaking Portal, email, postal mail and hand delivery/courier, the Department has found it necessary to make temporary modifications to the comment submission process in light of the ongoing coronavirus 2019 (“COVID-19”) pandemic. DOE is currently suspending receipt of public comments via postal mail and hand delivery/courier. If a commenter finds that this change poses an undue hardship, please contact Appliance Standards Program staff at (202) 586-1445 to discuss the need for alternative arrangements. Once the COVID-19 pandemic health emergency is resolved, DOE anticipates resuming all of its regular options for public comment submission, including postal mail and hand delivery/courier. Docket: The docket for this rulemaking, which includes Federal Register notices, comments, and other supporting documents/materials, is available for review at www.regulations.gov . All documents in the docket are listed in the www.regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available. The docket webpage can be found at www.regulations.gov/docket/EERE-2021-BT-STD-0027 . The docket webpage contains instructions on how to access all documents, including public comments, in the docket. See section VII, “Public Participation,” for information on how to submit comments through www.regulations.gov . 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 following the instructions at www.reginfo.gov . EPCA requires the Attorney General to provide DOE a written determination of whether the proposed standard is likely to lessen competition. The U.S. Department of Justice (“DOJ”) Antitrust Division invites input from market participants and other interested persons with views on the likely competitive impact of the proposed standard. Interested persons may contact the Division at energy.standards@usdoj.gov on or before the date specified in the DATES section. Please indicate in the “Subject” line of your email the title and Docket Number of this proposed rulemaking. FOR FURTHER INFORMATION CONTACT: Ms. Julia Hegarty, 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: (240) 597-6737. Email: ApplianceStandards Questions@ee.doe.gov . Mr. Matthew Ring, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-2555. Email: Matthew.Ring@hq.doe.gov . DOE has submitted the collection of information contained in the proposed rule to OMB for review under the Paperwork Reduction Act, as amended. (44 U.S.C. 3507(d)) Comments on the information collection proposal shall be directed to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Sofie Miller, OIRA Desk Officer by email: sofie.e.miller@omb.eop.gov . For further information on how to submit a comment, or review other public comments and the docket, contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email: ApplianceStandards Questions@ee.doe.gov . SUPPLEMENTARY INFORMATION: DOE proposes to update previously approved incorporations by reference of the following industry standards in part 431: ASTM C177-13, “Standard Test Method for Steady-State Heat Flux Measurements and Thermal Transmission Properties by Means of the Guarded-Hot-Plate Apparatus,” approved September 15, 2013. ASTM C518-15, “Standard Test Method for Steady-State Thermal Transmission Properties by Means of the Heat Flow Meter Apparatus,” approved September 1, 2015. Copies of ASTM C177-13 and ASTM C518-15 can be obtained from ASTM International, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959, (610) 832-9585, or go to www.astm.org . For a further discussion of these standards, see section VI.M of this document. Table of Contents I. Synopsis of the Proposed Rule A. Benefits and Costs to Consumers B. Impact on Manufacturers C. National Benefits and Costs D. Conclusion II. Introduction A. Authority B. Background and Rulemaking History C. Deviation From Appendix A III. General Discussion A. Test Procedures B. Scope of Rulemaking 1. Residential-Duty Commercial Water Heaters 2. Oil-Fired Commercial Water Heating Equipment 3. Unfired Hot Water Storage Tanks 4. Electric Instantaneous Water Heaters 5. Commercial Heat Pump Water Heaters 6. Electric Storage Water Heaters 7. Instantaneous Water Heaters and Hot Water Supply Boilers C. Technological Feasibility 1. General 2. Maximum Technologically Feasible Levels D. Energy Savings 1. Determination of Savings 2. Significance of Savings E. Economic Justification 1. Specific Criteria a. Economic Impact on Manufacturers and Commercial Consumers b. Savings in Operating Costs Compared to Increase in Price (Life-Cycle Costs) c. Energy Savings d. Lessening of Utility or Performance of Products e. Impact of Any Lessening of Competition f. Need for National Energy Conservation g. Other Factors 2. Rebuttable Presumption F. Revisions to Notes in Regulatory Text G. Certification, Compliance, and Enforcement Issues H. General Comments IV. Methodology and Discussion of Related Comments A. Market and Technology Assessment 1. Definitions 2. Equipment Classes a. Residential-Duty Electric Instantaneous Water Heaters b. Storage-Type Instantaneous Water Heaters c. Condensing Gas-Fired Water Heating Equipment d. Tankless Water Heaters and Hot Water Supply Boilers e. Gas-Fired and Oil-Fired Storage Water Heaters f. Grid-Enabled Water Heaters g. Input Capacity for Instantaneous Water Heaters and Hot Water Supply Boilers 3. Review of the Current Market for CWH Equipment 4. Technology Options B. Screening Analysis 1. Screened-Out Technologies 2. Remaining Technologies C. Engineering Analysis 1. Efficiency Analysis 2. Cost Analysis 3. Representative Equipment for Analysis 4. Efficiency Levels for Analysis a. Thermal Efficiency Levels b. Standby Loss Levels c. Uniform Energy Efficiency Levels 5. Standby Loss Reduction Factors 6. Teardown Analysis 7. Manufacturing Production Costs 8. Manufacturer Markup and Manufacturer Selling Price 9. Shipping Costs D. Markups Analysis 1. Distribution Channels 2. Comments on Withdrawn May 2016 CWH ECS NOPR 3. Markups Used in This NOPR E. Energy Use Analysis F. Life-Cycle Cost and Payback Period Analysis 1. Approach 2. Life-Cycle Cost Inputs a. Equipment Cost b. Installation Costs c. Annual Energy Consumption d. Energy Prices e. Maintenance Costs f. Repair Costs g. Product Lifetime h. Discount Rate i. Energy Efficiency Distribution in the No-New-Standards Case 3. Payback Period G. Shipments Analysis 1. Commercial Gas-Fired and Electric Storage Water Heaters 2. Residential-Duty Gas-Fired Storage and Instantaneous Water Heaters 3. Available Products Database and Equipment Efficiency Trends 4. Shipments to Residential Consumers 5. NOPR Shipments Model H. National Impact Analysis 1. Equipment Efficiency Trends 2. Fuel and Technology Switching 3. National Energy Savings 4. Net Present Value Analysis I. Consumer Subgroup Analysis 1. Residential Sector Subgroup Analysis J. Manufacturer Impact Analysis 1. Overview 2. Government Regulatory Impact Model and Key Inputs a. Manufacturer Production Costs b. Shipments Projections c. Product and Capital Conversion Costs d. Manufacturer Markup Scenarios K. Emissions Analysis 1. Air Quality Regulations Incorporated in DOE's Analysis L. Monetizing Emissions Impacts 1. Monetization of Greenhouse Gas Emissions a. Social Cost of Carbon b. Social Cost of Methane and Nitrous Oxide 2. Monetization of Other Air Pollutants M. Utility Impact Analysis N. Employment Impact Analysis V. Analytical Results and Conclusions A. Trial Standard Levels B. Economic Justification and Energy Savings 1. Economic Impacts on Individual Consumers a. Life-Cycle Cost and Payback Period b. Consumer Subgroup Analysis c. Rebuttable Presumption Payback 2. Economic Impacts on Manufacturers a. Industry Cash Flow Analysis Results b. 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 Consumer Costs and Benefits c. Indirect Impacts on Employment 4. Impact on Utility or Performance of Products 5. Impact of Any Lessening of Competition 6. Need of the Nation To Conserve Energy 7. Other Factors 8. Summary of National Economic Impacts C. Conclusion 1. Benefits and Burdens of TSLs Considered for CWH Equipment Standards 2. Annualized Benefits and Costs 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 1. Description of Reasons Why Action Is Being Considered 2. Objectives of, and Legal Basis for, Rule 3. Description on Estimated Number of Small Entities Regulated 4. Description and Estimate of Compliance Requirements 5. Duplication, Overlap, and Conflict With Other Rules and Regulations 6. Significant Alternatives to the Rule C. Review Under the Paperwork Reduction Act D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under the Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Information Quality M. Materials Incorporated by Reference VII. Public Participation A. Participation in the Webinar B. Procedure for Submitting Prepared General Statements for Distribution C. Conduct of the Webinar D. Submission of Comments E. Issues on Which DOE Seeks Comment VIII. Approval of the Office of the Secretary I. Synopsis of the Proposed Rule Title III, Part C 1 of EPCA, 2 established the Energy Conservation Program for Certain Industrial Equipment. (42 U.S.C. 6311-6317) Such equipment includes CWH equipment, the subject of this NOPR. (42 U.S.C. 6311(1)(K)) 1 For editorial reasons, upon codification in the U.S. Code, Part C was re-designated Part A-1. 2 All references to EPCA in this document refer to the statute as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 27, 2020). Pursuant to EPCA, DOE must consider amending the energy efficiency standards for certain types of commercial and industrial equipment, including the equipment at issue in this document, whenever the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (“ASHRAE”) amends the standard levels or design requirements prescribed in ASHRAE Standard 90.1, “Energy Standard for Buildings Except Low-Rise Residential Buildings,” (“ASHRAE Standard 90.1”), and at a minimum, every six 6 years. (42 U.S.C. 6313(a)(6)(A)-(C)) In accordance with these and other statutory provisions discussed in this document, DOE proposes amended energy conservation standards for certain classes of CWH equipment. The proposed standards, which are expressed in terms of thermal efficiency, standby loss, and uniform energy factor (“UEF”), are shown in Table I.1 and Table I.2. These proposed standards, if adopted, would apply to all CWH equipment listed in Table I.1 and Table I.2, manufactured in, or imported into the United States starting on the date 3 years after the publication of the final rule for this rulemaking. DOE is also proposing to codify standards for electric instantaneous CWH equipment from EPCA into the CFR. Finally, DOE is proposing several changes to the footnotes to tables of energy conservation standards at 10 CFR 431.110 to clarify existing regulations for CWH equipment. The proposed standards for electric instantaneous CWH equipment and changes to the footnotes are also shown in Table I.1. Table I.1—Proposed Energy Conservation Standards for Commercial Water Heating Equipment Except for Residential-Duty Commercial Water Heaters Equipment Size Energy conservation standards * Minimum thermal efficiency (%) Maximum standby loss † Gas-fired storage water heaters All 95 0.86 × [Q/800 + 110(V r ) 1/2 ] (Btu/h). Electric instantaneous water heaters ‡ <10 gal 80 N/A. ≥10 gal 77 2.30 + 67/V m (%/h). Gas-fired instantaneous water heaters and hot water supply boilers <10 gal 96 N/A. ≥10 gal 96 Q/800 + 110(V r ) 1/2 (Btu/h). * V m is the measured storage volume, and V r is the rated volume, both in gallons. Q is the rated input rate in Btu/h, as determined pursuant to 10 CFR 429.44. † Water heaters and hot water supply boilers having more than 140 gallons of storage capacity need not meet the standby loss requirement if: (1) The tank surface area is thermally insulated to R-12.5 or more, (2) a standing pilot light is not used, and (3) for gas or oil-fired storage water heaters, they have a flue damper or fan-assisted combustion. ‡ Energy conservation standards for electric instantaneous water heaters are included in EPCA. (42 U.S.C. 6313(a)(5)(D)-(E)) The compliance date for these energy conservation standards is January 1, 1994. In this NOPR, DOE proposes to codify these standards for electric instantaneous water heaters in its regulations at 10 CFR 431.110. Further discussion of standards for electric instantaneous water heaters is included in section III.B.4 of this NOPR. Table I.2—Proposed Amended Energy Conservation Standards for Gas-Fired Residential-Duty Commercial Water Heaters Equipment Specification * Draw pattern ** Uniform energy factor † Gas-fired Residential-Duty Storage >75 kBtu/h and ≤105 kBtu/h and ≤120 gal and ≤180 °F Very Small Low Medium High 0.5374−(0.0009 × V r ). 0.8062−(0.0012 × V r ). 0.8702−(0.0011 × V r ). 0.9297−(0.0009 × V r ). * Additionally, to be classified as a residential-duty water heater, a commercial water heater must meet the following conditions: (1) If requiring electricity, use single-phase external power supply; and (2) the water heater must not be designed to heat water at temperatures greater than 180 °F. ** Draw pattern is a classification of hot water use of a consumer water heater or residential-duty commercial water heater, based upon the first-hour rating. The draw pattern is determined using the Uniform Test Method for Measuring the Energy Consumption of Water Heaters in appendix E to subpart B of 10 CFR part 430. † V r is the rated storage volume (in gallons), as determined pursuant to 10 CFR 429.44. A. Benefits and Costs to Consumers Table I.3 presents DOE's evaluation of the economic impacts of the proposed standards on consumers of CWH equipment, as measured by the average life-cycle cost (“LCC”) savings and the simple payback period (“PBP”). 3 The average LCC savings are positive for all equipment classes, and the PBP is less than the average lifetime of CWH equipment, which is estimated to range from 10 years for commercial gas-fired storage water heaters to 25 years for instantaneous water heaters and hot water supply boilers (see section IV.F.2.g of this document). 3 The average LCC savings refer to consumers that are affected by a standard and are measured relative to the efficiency distribution in the no-new-standards case, which depicts the market in the compliance year in the absence of new or amended standards (see section IV.F.2.i of this document). The simple PBP, which is designed to compare specific efficiency levels, is measured relative to the baseline product (see section IV.F.3 of this document). Table I.3—Impacts of Proposed Energy Conservation Standards on Consumers of CWH Equipment Equipment Average LCC savings (2020$) Simple payback period (years) Commercial Gas-Fired Storage and Storage-Type Instantaneous 301 5 Residential-Duty Gas-Fired Storage 90 9 Gas-Fired Instantaneous Water Heaters and Hot Water Supply Boilers 599 9 —Instantaneous, Gas-Fired Tankless 63 9 —Instantaneous Water Heaters and Hot Water Supply Boilers 1,047 9 DOE's analysis of the impacts of the proposed standards on consumers is described in section IV.F of this document. B. Impact on Manufacturers 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 (2020-2055). Using a real discount rate of 9.1 percent, DOE estimates that the INPV for manufacturers of CWH Equipment in the case without amended standards is $183.1 million in 2020$. Under the proposed standards, the change in INPV is estimated to range from −12.8 percent to −5.9 percent, which is approximately equivalent to a decrease of $23.4 million to a decrease of $10.8 million, respectively. In order to bring products into compliance with amended standards, it is estimated that the industry would incur total conversion costs of $34.6 million. DOE's analysis of the impacts of the proposed standards on manufacturers is described in section IV.J of this document. The analytic results of the manufacturer impact analysis (“MIA”) are presented in section V.B.2 of this document. C. National Benefits and Costs 4 4 All monetary values in this document are expressed in 2020 dollars. DOE's analyses indicate that the proposed energy conservation standards for CWH equipment would save a significant amount of energy. Relative to the case without amended standards, the lifetime energy savings for CWH Equipment purchased in the 30-year period that begins in the anticipated year of compliance with the amended standards (2026-2055) amount to 0.70 quadrillion British thermal units (“Btu”), or quads. 5 This represents a savings of 4.9 percent relative to the energy use of these products in the case without amended standards (referred to as the “no-new-standards case”). 5 The quantity refers to full-fuel-cycle (“FFC”) energy savings. FFC energy savings include the energy consumed in extracting, processing, and transporting primary fuels ( i.e., coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy efficiency standards. For more information on the FFC metric, see section IV.H.3 of this document. The cumulative net present value (“NPV”) of total consumer benefits of the proposed standards for CWH equipment ranges from $0.48 billion (at a 7-percent discount rate) to $1.49 billion (at a 3-percent discount rate). This NPV expresses the estimated total value of future operating-cost savings minus the estimated increased product and installation costs for CWH equipment purchased in 2026-2055. In addition, the proposed standards for CWH equipment are projected to yield significant environmental benefits. DOE estimates that the proposed standards would result in cumulative emission reductions (over the same period as for energy savings) of 38 million metric tons (“Mt”) 6 of carbon dioxide (“CO 2 ”), −0.02 thousand tons of sulfur dioxide (“SO 2 ”), 95 thousand tons of nitrogen oxides (“NO X ”), 471 thousand tons of methane (“CH 4 ”), 0.07 thousand tons of nitrous oxide (“N 2 O”), and −0.001 tons of mercury (“Hg”). 7 6 A metric ton is equivalent to 1.1 short tons. Results for emissions other than CO 2 are presented in short tons. 7 DOE calculated emissions reductions relative to the no-new-standards case, which reflects key assumptions in the Annual Energy Outlook 2021 (“ AEO2021” ). AEO2021 represents current Federal and State legislation and final implementation of regulations as of the time of its preparation. See section IV.K for further discussion of AEO2021 assumptions that effect air pollutant emissions. DOE estimates climate benefits from a reduction in greenhouse gases using four different estimates of the “social cost of carbon” (“SC-CO 2 ”), the social cost of methane (“SC-CH 4 ”), and the social cost of nitrous oxide (“SC-N 2 O”). Together these represent the social cost of greenhouse gases (“SC-GHG”). DOE used interim estimates of SC-GHG values developed by an Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). 8 The derivation of these values is discussed in section IV.L.1. of this document. For presentational purposes, the climate benefits associated with the average SC-GHG at a 3-percent discount rate is $1.96 billion. DOE does not have a single central SC-GHG point estimate and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG estimates. 9 8 See Interagency Working Group on Social Cost of Greenhouse Gases, Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide. Interim Estimates Under Executive Order 13990, Washington, DC February 2021. www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf?source=email . 9 On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the Federal Government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of the Federal Government's appeal of that injunction or a further court order. Among other things, the preliminary injunction enjoined the defendants in that case from “adopting, employing, treating as binding, or relying upon” the interim estimates of the social cost of greenhouse gases—which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 2021—to monetize the benefits of reducing greenhouse gas emissions. In the absence of further intervening court orders, DOE will revert to its approach prior to the injunction and present monetized benefits where appropriate and permissible under law. DOE also estimates the health benefits from SO 2 and NO X emissions reduction. 10 DOE estimates the present value of the health benefits would be $0.99 billion using a 7-percent discount rate, and $2.62 billion using a 3-percent discount. DOE is currently only monetizing fine particulate matter (“PM 2.5 ”) and (for NO X ) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM 2.5 emissions. 10 DOE estimated the monetized value of SO 2 and NO X emissions reductions associated with site and electricity savings using benefit per ton estimates from the scientific literature. See section IV.L.2 of this document for further discussion. Table I.4 summarizes the economic benefits and costs expected to result from the proposed standards for CWH equipment. In the table, total benefits for both the 3-percent and 7-percent cases are presented using the average GHG social costs with 3-percent discount rate. DOE does not have a single central SC-GHG point estimate and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG estimates. The estimated total net benefits using each of the four SC-GHG estimates are presented in section V.B.6. of this document. Table I.4—Summary of Economic Benefits and Costs of Proposed Energy Conservation Standards for CWH Equipment [TSL 3] Billion 2020$ 3% Discount Rate Consumer Operating Cost Savings 2.4 Climate Benefits * 2.0 Health Benefits ** 2.6 Total Benefits † 7.0 Consumer Incremental Product Costs ‡ 1.0 Net Benefits 6.1 7% Discount Rate Consumer Operating Cost Savings 1.0 Climate Benefits * (3% discount rate) 2.0 Health Benefits ** 1.0 Total Benefits † 4.0 Consumer Incremental Product Costs ‡ 0.6 Net Benefits 3.4 Note: This table presents the costs and benefits associated with commercial water heaters shipped in 2026-2055. These results include benefits to consumers which accrue after 2055 from the products shipped in 2026-2055. Numbers may not add due to rounding. * Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO 2 ), methane (SC-CH 4 ), and nitrous oxide (SC-N 2 O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3 percent discount rate), as shown in Table V.37 through Table V.39. Together these represent the global social cost of greenhouse gases (SC-GHG). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate. See section IV.L of this document for more details. ** Health benefits are calculated using benefit-per-ton values for NO X and SO 2 . DOE is currently only monetizing PM 2.5 and (for NO X ) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM 2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details. † Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four SC-GHG estimates. See Table V.42 for net benefits using all four SC-GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of the federal government's appeal of that injunction or a further court order. Among other things, the preliminary injunction enjoined the defendants in that case from “adopting, employing, treating as binding, or relying upon” the interim estimates of the social cost of greenhouse gases—which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 2021—to monetize the benefits of reducing greenhouse gas emissions. In the absence of further intervening court orders, DOE will revert to its approach prior to the injunction and present monetized benefits where appropriate and permissible under law. ‡ Costs include incremental equipment costs as well as installation costs. The benefits and costs of the proposed standards can also be expressed in terms of annualized values. The monetary values for the total annualized net benefits are (1) the reduced consumer operating costs, minus (2) the increase in product purchase prices and installation costs, plus (3) the value of the benefits of GHG, NO X , and SO 2 emission reductions, all annualized. 11 11 To convert the time-series of costs and benefits into annualized values, DOE calculated a present value in 2021, the year used for discounting the NPV of total consumer costs and savings. For the benefits, DOE calculated a present value associated with each year's shipments in the year in which the shipments occur ( e.g., 2030), and then discounted the present value from each year to 2021. The calculation uses discount rates of 3 and 7 percent for all costs and benefits except for the value of CO 2 reductions, for which DOE used case-specific discount rates, as shown in Table I.3. Using the present value, DOE then calculated the fixed annual payment over a 30-year period, starting in the compliance year, that yields the same present value. The national operating savings are domestic private U.S. consumer monetary savings that occur as a result of purchasing the covered products and are measured for the lifetime of CWH equipment shipped in 2026-2055. The climate benefits associated with reduced GHG emissions achieved as a result of the proposed standards are also calculated based on the lifetime of CWH equipment shipped in 2026-2055. 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 consumer benefits and costs and health benefits from reduced SO 2 and NO X emissions, and the 3-percent discount rate case for climate benefits from reduced GHG emissions, the estimated cost of the standards proposed in this rulemaking is $59 million per year in increased equipment costs, while the estimated annual benefits are $110 million in reduced equipment operating costs, $113 million in climate benefits, and $104 million in health benefits. In this case, the net benefit would amount to $267 million per year. Using a 3-percent discount rate for all benefits and costs, the estimated cost of the proposed standards is $55 million per year in increased equipment costs, while the estimated annual benefits are $140 million in reduced operating costs, $113 million in climate benefits, and $150 million in health benefits. In this case, the net benefit would amount to $349 million per year. Table I.5—Annualized Benefits and Costs of Proposed Energy Conservation Standards for CWH Equipment [TSL 3] Category Million 2020$/year Primary estimate Low-net- benefits estimate High-net- benefits estimate 3% Discount Rate Consumer Operating Cost Savings 140.3 130.3 151.7 Climate Benefits * 112.8 107.2 117.8 Health Benefits ** 150.4 143.5 170.0 Total Benefits † 404 381 439 Consumer Incremental Product Costs ‡ 54.7 52.6 56.6 Net Benefits 349 328 383 7% Discount Rate Consumer Operating Cost Savings 109.6 103.3 116.7 Climate Benefits * (3% discount rate) 112.8 107.2 117.8 Health Benefits ** 104.3 100.4 117.2 Total Benefits † 327 311 352 Consumer Incremental Product Costs ‡ 59.2 57.5 60.9 Net Benefits 267 253 291 Note: This table presents the annualized costs and benefits associated with CWH equipment shipped in 2026-2055. These results include benefits to consumers which accrue after 2055 from the products purchased in 2026-2055. * Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO 2 ), methane (SC-CH 4 ), and nitrous oxide (SC-N 2 O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates; 95th percentile at 3 percent discount rate). Together these represent the global social cost of greenhouse gases (SC-GHG). For presentational purposes of this table, the climate benefits associated with the average SC-GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-GHG estimates. See section IV.L of this document for more details. ** Health benefits are calculated using benefit-per-ton values for NO X and SO 2 . DOE is currently only monetizing PM 2.5 and (for NO X ) ozone precursor health benefits, but will continue to assess the ability to monetize other effects such as health benefits from reductions in direct PM 2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L of this document for more details. † Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four SC-GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of the federal government's appeal of that injunction or a further court order. Among other things, the preliminary injunction enjoined the defendants in that case from “adopting, employing, treating as binding, or relying upon” the interim estimates of the social cost of greenhouse gases—which were issued by the Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 2021—to monetize the benefits of reducing greenhouse gas emissions. In the absence of further intervening court orders, DOE will revert to its approach prior to the injunction and present monetized benefits where appropriate and permissible under law. ‡ Costs include incremental equipment costs as well as installation costs. DOE's analysis of the national impacts of the proposed standards is described in sections IV.H, IV.K, and IV.L of this document. D. Conclusion DOE has tentatively concluded that, based on clear and convincing evidence as presented in the following sections, the proposed standards are technologically feasible and economically justified, and would result in the significant additional conservation of energy. Specifically, with regards to technological feasibility, CWH equipment achieving these standard levels are already commercially available for all equipment classes covered by this proposal. As for economic justification, DOE's analysis shows that the benefits of the proposed standard exceed, to a great extent, the burdens of the proposed standards. Using a 7-percent discount rate for consumer benefits and costs and NO X and SO 2 reduction benefits, and a 3-percent discount rate case for GHG social costs, the estimated cost of the proposed standards for CWH equipment is $59.2 million per year in increased equipment costs, while the estimated annual benefits are $109.6 million in reduced equipment operating costs, $112.8 million in GHG reductions, $104.6 million in reduced NO X emissions, and −$0.30 million in (increased) SO 2 emissions. The net benefit amounts to $267.4 million per year. As previously mentioned, the proposed standards would result in estimated national energy savings of 0.70 quad, the equivalent of the electricity use of 7.0 million homes in one year. In determining whether energy savings are significant, DOE considers the specific circumstances surrounding a given rulemaking. 12 In making this determination, DOE looks at, among other things, the FFC effects of the proposed standards. These effects include the energy consumed in electricity production (depending on load shape), in distribution and transmission, and in extracting, processing, and transporting primary fuels ( i.e., coal, natural gas, petroleum fuels), and thus present a more complete picture of the impacts of energy conservation standards, including greenhouse gas emissions. Accordingly, taking into account the significance of cumulative FFC national energy savings, the cumulative FFC emissions reductions, and the need to confront the global climate crisis, among other factors, DOE has initially determined the energy savings for the TSL proposed in this rulemaking are “significant” within the meaning of EPCA. Finally, DOE notes that a more detailed discussion of the basis for these tentative conclusions is contained in the remainder of this document and the accompanying TSD. Based on available facts, data, and DOE's own analyses, DOE has preliminarily determined that it is highly probable an amended standard would result in a significant additional amount of energy savings, and is technologically feasible and economically justified. 12 Procedures, Interpretations, and Policies for Consideration in New or Revised Energy Conservation Standards and Test Procedures for Consumer Products and Commercial/Industrial Equipment, 86 FR 70892, 70901 (Dec. 13, 2021). DOE also considered more-stringent energy efficiency levels as potential standards, and is still considering them in this rulemaking. However, DOE has tentatively concluded that the potential burdens of the more-stringent energy efficiency levels would outweigh the projected benefits. Based on consideration of the public comments DOE receives in response to this document and related information collected and analyzed during the course of this rulemaking effort, DOE may adopt energy efficiency levels presented in this document that are either higher or lower than the proposed standards, or some combination of level(s) that incorporate the proposed standards in part. II. Introduction The following section briefly discusses the statutory authority underlying this NOPR, as well as some of the historical background relevant to the establishment of the amended standards for CWH equipment. A. Authority EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and industrial equipment. Title III, Part C of EPCA, added by Public Law 95-619, Title IV, section 441(a) (42 U.S.C. 6311-6317, as codified), established the Energy Conservation Program for Certain Industrial Equipment, which sets forth a variety of provisions designed to improve energy efficiency. This equipment includes the classes of CWH equipment that are the subject of this NOPR. (42 U.S.C. 6311(1)(K)) EPCA prescribed energy conservation standards for CWH equipment. (42 U.S.C. 6313(a)(5)) Additionally, DOE must consider amending the energy efficiency standards for certain types of commercial and industrial equipment, including CWH equipment, whenever ASHRAE amends the standard levels or design requirements prescribed in ASHRAE/IES Standard 90.1, and at a minimum, every 6 years. (42 U.S.C. 6313(a)(6)(A)-(C)) The energy conservation program for covered products under EPCA consists essentially of four parts: (1) Testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6311), energy conservation standards (42 U.S.C. 6313), test procedures (42 U.S.C. 6314), labeling provisions (42 U.S.C. 6315), and the authority to require information and reports from manufacturers (42 U.S.C. 6316). Federal energy conservation requirements for covered equipment established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6316(a) and (b); 42 U.S.C. 6297) DOE may, however, grant waivers of Federal preemption for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. ( See 42 U.S.C. 6316(b)(2)(D)) Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of covered equipment. (42 U.S.C. 6314) Manufacturers of covered equipment must use the Federal test procedures as the basis for (1) certifying to DOE that their equipment complies with the applicable energy conservation standards adopted pursuant to EPCA (42 U.S.C. 6316(b); 42 U.S.C. 6296), and (2) making representations about the efficiency of that equipment (42 U.S.C. 6314(d)). Similarly, DOE uses these test procedures to determine whether the equipment complies with relevant standards promulgated under EPCA. The DOE test procedures for CWH equipment appear at part 431, subpart G. ASHRAE Standard 90.1 sets industry energy efficiency levels for small, large, and very large commercial package air-conditioning and heating equipment, packaged terminal air conditioners, packaged terminal heat pumps, warm air furnaces, packaged boilers, storage water heaters, instantaneous water heaters, and unfired hot water storage tanks (collectively “ASHRAE equipment”). For each type of listed equipment, EPCA directs that if ASHRAE amends Standard 90.1, DOE must adopt amended standards at the new ASHRAE efficiency level, unless DOE determines, supported by clear and convincing evidence, 13 that adoption of a more stringent level would produce significant additional conservation of energy and would be technologically feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii) (The threshold for “clear and convincing” evidence is discussed in more detail in section III.H.) Under EPCA, DOE must also review energy efficiency standards for CWH equipment every 6 years and either: (1) Issue a notice of determination that the standards do not need to be amended as adoption of a more stringent level is not supported by clear and convincing evidence; or (2) issue a notice of proposed rulemaking including new proposed standards based on certain criteria and procedures in subparagraph (B) of 42 U.S.C. 6313(a)(6). (42 U.S.C. 6313(a)(6)(C)) 13 The clear and convincing threshold is a heightened standard, and would only be met where the Secretary has an abiding conviction, based on available facts, data, and DOE's own analyses, that it is highly probable an amended standard would result in a significant additional amount of energy savings, and is technologically feasible and economically justified. American Public Gas Association v. U.S. Dep't of Energy, No. 20-1068, 2022 WL 151923, at *4 (D.C. Cir. January 18, 2022) (citing Colorado v. New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 81 L.Ed.2d 247 (1984)). In deciding whether a more-stringent standard is economically justified, under either the provisions of 42 U.S.C. 6313(a)(6)(A) or 42 U.S.C. 6313(a)(6)(C), DOE must determine whether the benefits of the standard exceed its burdens. DOE must make this determination after receiving comments on the proposed standard, and by considering, to the maximum extent practicable, the following seven factors: (1) The economic impact of the standard on manufacturers and consumers of 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 equipment that are likely to result from the standard; (3) The total projected amount of energy savings likely to result directly from the standard; (4) Any lessening of the utility or the performance of the covered product likely to result from the standard; (5) The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the standard; (6) The need for national energy conservation; and (7) Other factors the Secretary of Energy considers relevant. (42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII)) Further, EPCA establishes a rebuttable presumption that an energy conservation standard is economically justified if the Secretary finds that the additional cost to the consumer of purchasing a product that complies with the standard will be less than three times the value of the energy (and, as applicable, water) 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)) However, while this rebuttable presumption analysis applies to most commercial and industrial equipment (42 U.S.C. 6316(a)), it is not a required analysis for ASHRAE equipment (42 U.S.C. 6316(b)(1)). Nonetheless, DOE included the analysis of rebuttable presumption in its economic analysis and presents the results in section V.B.1.c of this document. EPCA also contains what is known as an “anti-backsliding” provision, which prevents the Secretary from prescribing any amended standard that either increases the maximum allowable energy use or decreases the minimum required energy efficiency of a covered product. (42 U.S.C. 6313(a)(6)(B)(iii)(I)) Also, the Secretary may not prescribe an amended or new standard if interested persons have established by a preponderance of the evidence that the standard is likely to result in the unavailability in the United States in any covered product type (or class) of performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as those generally available in the United States. (42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa)) B. Background and Rulemaking History As previously noted, EPCA established initial Federal energy conservation standards for CWH equipment that generally corresponded to the levels in ASHRAE Standard 90.1-1989. On October 29, 1999, ASHRAE released Standard 90.1-1999, which included new efficiency levels for numerous categories of CWH equipment. DOE evaluated these new standards and subsequently amended energy conservation standards for CWH equipment in a final rule published in the Federal Register on January 12, 2001. 66 FR 3336 (“January 2001 final rule”). DOE adopted the levels in ASHRAE Standard 90.1-1999 for all classes of CWH equipment, except for electric storage water heaters. For electric storage water heaters, the standard in ASHRAE Standard 90.1-1999 was less stringent than the standard prescribed in EPCA and, consequently, would have increased energy consumption. Under those circumstances, DOE could not adopt the new efficiency level for electric storage water heaters in ASHRAE Standard 90.1-1999. 66 FR 3336, 3350. In the January 2001 final rule, DOE also adopted the efficiency levels contained in the Addendum to ASHRAE Standard 90.1-1989 for hot water supply boilers, which were identical to the efficiency levels for instantaneous water heaters. 66 FR 3336, 3356. On October 21, 2004, DOE published a direct final rule in the Federal Register (“October 2004 direct final rule”) that recodified the existing energy conservation standards, so that they are located contiguous with the test procedures that were promulgated in the same notice. 69 FR 61974. The October 2004 final rule also updated definitions for CWH equipment at 10 CFR 431.102. The American Energy Manufacturing Technical Corrections Act (“AEMTCA”), Public Law 112-210 (Dec. 18, 2012), amended EPCA to require that DOE publish a final rule establishing a uniform efficiency descriptor and accompanying test methods for covered consumer water heaters and some CWH equipment. (42 U.S.C. 6295(e)(5)(B)) EPCA further required that the final rule must replace the energy factor (for consumer water heaters) and thermal efficiency and standby loss (for some commercial water heaters) metrics with a uniform efficiency descriptor. (42 U.S.C. 6295(e)(5)(C)) Pursuant to 42 U.S.C. 6295(e), on July 11, 2014, DOE published a final rule for test procedures for residential and certain commercial water heaters (“July 2014 final rule”) that, among other things, established UEF, a revised version of the current residential energy factor metric, as the uniform efficiency descriptor required by AEMTCA. 79 FR 40542, 40578. In addition, the July 2014 final rule defined the term “residential-duty commercial water heater,” an equipment category that is subject to the new UEF metric and the corresponding UEF test procedures. 79 FR 40542, 40586-40588 (July 11, 2014). Conversely, CWH equipment that does not meet the definition of a residential-duty commercial water heater is not subject to the UEF metric or corresponding UEF test procedures. Id. Further details on the UEF metric and residential-duty commercial water heaters are discussed in section III.A of this document. In a NOPR published on April 14, 2015 (“April 2015 NOPR”), DOE proposed, among other things, conversion factors from thermal efficiency and standby loss to UEF for residential-duty commercial water heaters. 80 FR 20116, 20143. Subsequently, in a final rule published on December 29, 2016 (the “December 2016 conversion factor final rule”), DOE specified standards for residential-duty commercial water heaters in terms of UEF. However, while the metric was changed from thermal efficiency and/or standby loss, the stringency was not changed. 81 FR 96204, 96239 (Dec. 29, 2016). In ASHRAE Standard 90.1-2013, ASHRAE increased the thermal efficiency level for commercial oil-fired storage water heaters, thereby triggering DOE's statutory obligation to promulgate an amended uniform national standard at those levels, unless DOE were to determine that there is clear and convincing evidence supporting the adoption of more-stringent energy conservation standards than the ASHRAE levels. 14 In a final rule published on July 17, 2015 (“July 2015 ASHRAE equipment final rule”), among other things, DOE adopted the standard for commercial oil-fired storage water heaters at the level set forth in ASHRAE Standard 90.1-2013, which increased the standard from 78 to 80 percent thermal efficiency with compliance required starting on October 9, 2015. 80 FR 42614 (July 17, 2015). Since that time ASHRAE has issued 2 updated versions of Standard 90.1, 90.1-2016 and 90.1-2019. However, DOE was not triggered to review amended standards for commercial water heaters by any updates in ASHRAE Standard 90.1-2016 or ASHRAE Standard 90.1-2019. Overall, DOE has not been triggered to review the standards for the equipment subject to this rulemaking based on an update to the efficiency levels in ASHRAE Standard 90.1 since the 1999 edition because ASHRAE has not updated the efficiency levels for such equipment since 1999. The current standards for all CWH equipment classes are set forth in DOE's regulations at 10 CFR 431.110, except for electric instantaneous water heaters that are not residential-duty, which are included in EPCA (the history of the standards for electric instantaneous water heaters is discussed in section III.B.4 of this document). (42 U.S.C. 6313(a)(5)(D)-(E)) Table II.1 shows the current standards for all CWH equipment classes, except residential-duty commercial water heaters, which are shown in Table II.2 of this document. 14 ASHRAE Standard 90.1-2013 also appeared to change the standby loss levels for four equipment classes (gas-fired storage water heaters, oil-fired storage water heaters, gas-fired instantaneous water heaters, and oil-fired instantaneous water heaters) to efficiency levels that surpassed the Federal energy conservation standard levels. However, upon reviewing the changes DOE concluded that all changes to standby loss levels for these equipment classes were editorial errors because they were identical to SI (International System of Units; metric system) formulas rather than I-P (Inch-Pound; English system) formulas. As a result, DOE did not conduct an analysis of the potential energy savings from amended standby loss standards for this equipment in response to the ASHRAE updates. DOE did not receive any comments on this issue. 80 FR 1171, 1185 (January 8, 2015). The standby loss levels for these equipment classes were reverted to the previous levels in ASHRAE Standard 90.1-2016 and have not been updated since then. Table II.1—Current Federal Energy Conservation Standards for CWH Equipment Except for Residential-Duty Commercial Water Heaters Product Size Energy conservation standards * Minimum thermal efficiency (equipment manufactured on and after October 9, 2015) ** *** (%) Maximum standby loss (equipment manufactured on and after October 29, 2003) ** † Electric storage water heaters All N/A 0.30 + 27/V m (%/h). Gas-fired storage water heaters ≤155,000 Btu/h 80 Q/800 + 110(V r ) 1/2 (Btu/h). >155,000 Btu/h 80 Q/800 + 110(V r ) 1/2 (Btu/h). Oil-fired storage water heaters ≤155,000 Btu/h *** 80 Q/800 + 110(V r ) 1/2 (Btu/h). >155,000 Btu/h *** 80 Q/800 + 110(V r ) 1/2 (Btu/h). Electric instantaneous water heaters ‡ <10 gal 80 N/A. ≥10 gal 77 2.30 + 67/V m (%/h). Gas-fired instantaneous water heaters and hot water supply boilers <10 gal 80 N/A. ≥10 gal 80 Q/800 + 110(V r ) 1/2 (Btu/h). Oil-fired instantaneous water heater and hot water supply boilers <10 gal 80 N/A. ≥10 gal 78 Q/800 + 110(V r ) 1/2 (Btu/h). Minimum thermal insulation Unfired hot water storage tank All R-12.5 * V m is the measured storage volume, and V r is the rated volume, both in gallons. Q is the nameplate input rate in Btu/h. ** For hot water supply boilers with a capacity of less than 10 gallons: (1) The standards are mandatory for products manufactured on and after October 21, 2005 and (2) products manufactured prior to that date, and on or after October 23, 2003, must meet either the standards listed in this table or the applicable standards in subpart E of this part for a “commercial packaged boiler.” *** For oil-fired storage water heaters: (1) The standards are mandatory for equipment manufactured on and after October 9, 2015 and (2) equipment manufactured prior to that date must meet a minimum thermal efficiency level of 78 percent. † Water heaters and hot water supply boilers having more than 140 gallons of storage capacity need not meet the standby loss requirement if: (1) The tank surface area is thermally insulated to R-12.5 or more, (2) a standing pilot light is not used, and (3) for gas or oil-fired storage water heaters, they have a fire damper or fan-assisted combustion. ‡ Energy conservation standards for electric instantaneous water heaters are included in EPCA. (42 U.S.C. 6313(a)(5)(D)-(E)) The compliance date for these energy conservation standards is January 1, 1994. In this NOPR, DOE proposes to codify these standards for electric instantaneous water heaters in its regulations at 10 CFR 431.110. Further discussion of standards for electric instantaneous water heaters is included in section III.B.4 of this NOPR. Table II.2—Current Energy Conservation Standards for Residential-Duty Commercial Water Heaters Equipment Specification * Draw pattern ** Uniform energy factor Compliance date Gas-fired Storage >75 kBtu/h and ≤105 kBtu/h and ≤120 gal Very Small 0.2674−(0.0009 × V r ) December 29, 2016. Low 0.5362−(0.0012 × V r ) Medium 0.6002−(0.0011 × V r ) High 0.6597−(0.0009 × V r ) Oil-fired storage >105 kBtu/h and ≤140 kBtu/h and ≤120 gal Very Small 0.2932−(0.0015 × V r ) Low 0.5596−(0.0018 × V r ) Medium 0.6194−(0.0016 × V r ) High 0.6740−(0.0013 × V r ) Electric instantaneous >12 kW and ≤58.6 kW and ≤ 2 gal Very Small 0.80 Low 0.80 Medium 0.80 High 0.80 * Additionally, to be classified as a residential-duty water heater, a commercial water heater must meet the following conditions: (1) If requiring electricity, use single-phase external power supply; and (2) the water heater must not be designed to heat water at temperatures greater than 180 °F. ** Draw pattern is a classification of hot water use of a consumer water heater or residential-duty commercial water heater, based upon the first-hour rating. The draw pattern is determined using the Uniform Test Method for Measuring the Energy Consumption of Water Heaters in appendix E to subpart B of 10 CFR part 430. On October 21, 2014, DOE published a request for information (“RFI”) as an initial step for reviewing the energy conservation standards for CWH equipment. 79 FR 62899 (“October 2014 RFI”). The October 2014 RFI solicited information from the public to help DOE determine whether more-stringent energy conservation standards for CWH equipment would result in a significant amount of additional energy savings, and whether those standards would be technologically feasible and economically justified. 79 FR 62899, 62899-62900. DOE received a number of comments from interested parties in response to the October 2014 RFI. On May 31, 2016, DOE published a NOPR and notice of public meeting in the Federal Register (“May 2016 CWH ECS NOPR”) that addressed all of the comments received in response to the RFI and proposed amended energy conservation standards for CWH equipment. 81 FR 34440. The May 2016 CWH ECS NOPR and the technical support document (“TSD”) for that NOPR are available at www.regulations.gov/docket?D=EERE-2014-BT-STD-0042 . On June 6, 2016, DOE held a public meeting at which it presented and discussed the analyses conducted as part of this rulemaking ( e.g., engineering analysis, LCC, PBP, and MIA). In the public meeting, DOE presented the results of the analysis and requested comments from stakeholders on various issues related to the rulemaking in response to the May 2016 CWH ECS NOPR. DOE received a number of comments from interested parties in response to the May 2016 CWH ECS NOPR. Table II.3 identifies these commenters. Although DOE withdrew the May 2016 CWH ECS NOPR (as discussed in the following paragraphs), DOE considered comments received in response to that document to the extent relevant to the preparation of this NOPR. Table II.3—Interested Parties Providing Written and Oral Comments on the May 2016 CWH ECS NOPR Name Abbreviation Commenter type * Appliance Standards Awareness Project, Alliance to Save Energy, Northeast Energy Efficiency Partnership, American Council for an Energy-Efficient Economy, EarthJustice Joint Advocates EA Northwest Energy Efficiency Alliance NEEA EA Air-Conditioning, Heating and Refrigeration Institute AHRI TA The U.S. Chamber of Commerce, the American Chemistry Council, the American Coke and Coal Chemicals Institute, the American Forest & Paper Association, the American Fuel & Petrochemical Manufacturers, the American Petroleum Institute, the Brick Industry Association, the Council of Industrial Boiler Owners, the National Association of Manufacturers, the National Mining Association, the National Oilseed Processors Association, and the Portland Cement Association The Associations TA Industrial Energy Consumers of America IECA TA American Gas Association and American Public Gas Association AGA and APGA UA Edison Electric Institute EEI UA National Propane Gas Association NPGA IR National Rural Electric Cooperative Association, American Public Power Association, Edison Electric Institute Joint Utilities IR Plumbing-Heating-Cooling Contractors National Association PHCC IR A.O. Smith Corporation A.O. Smith M Bock Water Heaters, Inc Bock M Bradford White Corporation Bradford White M HTP, Inc HTP M Raypak, Inc Raypak M Rheem Corporation Rheem M California Energy Commission CEC OS Environmental Defense Fund, Institute for Policy Integrity at New York University School of Law, Natural Resources Defense Council, and Union of Concerned Scientists Joint Organizations OS Pacific Gas and Electric Company, Southern California Gas Company, San Diego Gas and Electric, and Southern California Edison CA IOUs U Spire Inc Spire U Anonymous Anonymous I Johnnie Temples Johnnie Temples I PVI Industries, Inc PVI M NegaWatt Consulting NegaWatt OS Bradley Corporation Bradley M * TA: trade association, EA: efficiency/environmental advocate, IR: industry representative, M: manufacturer, OS: other stakeholder, U: utility or utilities filing jointly, UA: utility association, and I: individual. A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record. 15 15 The parenthetical reference provides a reference for information located in the docket. (Docket No. EERE-2014-BT-STD-0042, which is maintained at www.regulations.gov/#!docketDetail;D=EERE-2014-BT-STD-0042 ). The references are arranged as follows: (commenter name, comment docket ID number, page of that document). On December 23, 2016, DOE published a notice of data availability (“NODA”) for energy conservation standards for CWH equipment (“December 2016 CWH ECS NODA”). 81 FR 94234. The December 2016 CWH ECS NODA presented the thermal efficiency and standby loss levels analyzed in the May 2016 CWH ECS NOPR for residential-duty gas-fired storage water heaters in terms of UEF, using the updated conversion factors for gas-fired and oil-fired storage water heaters adopted in the December 2016 conversion factor final rule (81 FR 94234, 94237). On January 15, 2021, in response to a petition for rulemaking submitted by the American Public Gas Association, Spire, Inc., the Natural Gas Supply Association, the American Gas Association, and the National Propane Gas Association (83 FR 54883; Nov. 1, 2018) DOE published a final interpretive rule (“the January 2021 final interpretive rule”) determining that, in the context of residential furnaces, commercial water heaters, and similarly-situated products/equipment, use of non-condensing technology (and associated venting) constitute a performance-related “feature” under EPCA that cannot be eliminated through adoption of an energy conservation standard. 86 FR 4776. Correspondingly, DOE withdrew the May 2016 CWH ECS NOPR. 86 FR 3873 (Jan. 15, 2021). However, DOE has subsequently published a final interpretive rule that returns to the previous and long-standing interpretation (in effect prior to the January 15, 2021 final interpretive rule), under which the technology used to supply heated air or hot water is not a performance-related “feature” that provides a distinct consumer utility under EPCA. 86 FR 73947 (Dec. 29, 2021). In conducting the analysis for this NOPR, DOE evaluates condensing technologies and associated venting systems ( i.e., trial standard levels (“TSLs”) 2, 3, and 4) in its analysis of potential energy conservation standards. Any adverse impacts on utility and availability of non-condensing technology options are considered in DOE's analyses of these TSLs. As illustrated by the preceding discussion, the rulemaking for CWH equipment has been subject to multiple rounds of public comment, including public meetings, and extensive records have been developed in the relevant dockets. (See Docket Number EERE-2014-BT-STD-0042, respectively). Consequently, the information obtained through those earlier rounds of public comment, information exchange, and data gathering have been considered in this rulemaking and DOE is building upon the existing record through further analysis and further notice and comment. C. Deviation From Appendix A On January 11, 2022, DOE published a test procedure NOPR for consumer water heaters and residential-duty commercial water heaters. 87 FR 1554. In accordance with section 3(a) of 10 CFR part 430, subpart C, appendix A (“appendix A”), DOE notes that it is deviating from the provision in appendix A specifying that test procedures be finalized at least 180 days before new or amended standards are proposed for the same equipment. 10 CFR part 430, subpart C, appendix A, section 8(d)(2). DOE is opting to deviate from this step because the proposed test procedure amendments for residential-duty commercial water heaters are not expected to impact the current efficiency ratings. Further, the test procedure final rule for consumer water heaters and residential-duty commercial water heaters is expected to publish before a final rule in this proposed rulemaking. If DOE determines that the test procedure amendments for residential-duty commercial water heaters do in fact impact the efficiency ratings, DOE will review the implications of those changes before finalizing amended standards for residential-duty commercial water heaters. Issue 1: DOE requests comment on its assumption that the proposed test procedure amendments for residential-duty commercial water heaters are not expected to impact the efficiency ratings. III. General Discussion DOE developed this proposed rule after considering comments, data, and information from interested parties that represent a variety of interests. This proposed rule addresses issues raised by commenters to the extent relevant to the preparation of this NOPR. A. Test Procedures DOE's current test procedures for CWH equipment are specified at 10 CFR 431.106 and provide mandatory methods for determining the thermal efficiency, standby loss, and UEF, as applicable, of CWH equipment. As noted previously, on October 21, 2004, DOE published the October 2004 direct final rule, which adopted amended test procedures for CWH equipment. 69 FR 61974. These test procedure amendments incorporated by reference certain sections of ANSI Z21.10.3-1998, “Gas Water Heaters, Volume III, Storage Water Heaters with Input Ratings above 75,000 Btu per Hour, Circulating and Instantaneous.” Id. at 69 FR 61983. On May 16, 2012, DOE published a final rule for certain commercial heating, air-conditioning, and water heating equipment in the Federal Register that, among other things, updated the test procedures for certain CWH equipment by incorporating by reference ANSI Z21.10.3-2011. 77 FR 28928. These updates did not materially alter DOE's test procedure for CWH equipment. On May 9, 2016, DOE published a NOPR that proposed to amend the test procedures for certain CWH equipment (“May 2016 CWH TP NOPR”). 81 FR 28588. In the May 2016 CWH TP NOPR, DOE proposed several changes, including (1) updating references of industry test standards to incorporate by reference the most recent versions of the industry standards; (2) updating the requirements for ambient conditions, measurement locations, and measurement intervals for the thermal efficiency and standby loss test procedures; (3) amending the test procedure set-up requirements for storage water heaters, storage-type instantaneous water heaters, instantaneous water heaters, and hot water supply boilers; (4) developing a test method for determining the standby loss of unfired hot water storage tanks; (5) updating provisions for setting the tank thermostat for storage and storage-type instantaneous water heaters prior to the thermal efficiency and standby loss tests; (6) clarifying the thermal efficiency and standby loss test procedures with regard to stored energy loss and manipulation of settings during efficiency testing; (7) defining “storage-type instantaneous water heater” and modifying several definitions for certain consumer water heaters and CWH equipment included at 10 CFR 430.2 and 10 CFR 431.102, respectively; (8) updating DOE's procedures for determining storage volume and standby loss of instantaneous water heaters and hot water supply boilers (other than storage-type instantaneous water heaters); (9) developing a new test procedure for commercial heat pump water heaters and incorporating by reference certain sections, figures, and tables from ASHRAE 118.1-2012; (10) establishing a procedure for determining the fuel input rate of gas-fired and oil-fired CWH equipment and clarifying DOE's certification and enforcement regulations regarding fuel input rate; and (11) establishing default values for certain testing parameters for oil-fired CWH equipment. On November 10, 2016, DOE published a final rule amending the test procedures for certain CWH equipment (“November 2016 CWH TP final rule”). 81 FR 79261. In the November 2016 CWH TP final rule, DOE generally adopted the proposals set forth in the May 2016 CWH TP NOPR, except that it did not adopt the following proposals: (1) Ambient humidity requirements, (2) tightened ambient room temperature allowable range (75 °F ± 5 °F), and (3) requirements that the certified fuel input rate be equal to the mean of the measured values of fuel input rate in a sample. In that final rule, DOE also amended its regulations for gas supply and outlet pressure of gas-fired CWH equipment, modified the definition for “storage-type instantaneous water heater,” and updated the requirements for establishing steady-state operation. DOE received many industry comments in response to DOE's proposed standby loss test procedure for unfired hot water storage tanks, and in the November 2016 CWH TP final rule, DOE stated that it was still considering these comments and would address the comments and its proposed test procedure for unfired hot water storage tanks in a separate rulemaking notice. 81 FR 79261, 79277 (Nov. 10, 2016). In addition, as discussed in section II.B, AEMTCA amended EPCA to require that DOE publish a final rule establishing a uniform efficiency descriptor and accompanying test methods for covered consumer water heaters and certain CWH equipment. (42 U.S.C. 6295(e)(5)(B)) The AEMTCA amendments required DOE, in the final rule, to replace the current energy factor (for consumer water heaters) and thermal efficiency and standby loss (for commercial water heaters) metrics with a uniform efficiency descriptor. (42 U.S.C. 6295(e)(5)(C)) However, under the AEMTCA amendments, DOE may provide an exclusion from the uniform efficiency descriptor for specific categories of covered water heaters that do not have residential uses, that can be clearly described, and that are effectively rated using the current thermal efficiency and standby loss descriptors. (42 U.S.C. 6295(e)(5)(F)) The AEMTCA amendments to EPCA further require that, along with developing a uniform descriptor, DOE develop a mathematical conversion factor to translate the results based upon use of the efficiency metric under the test procedure in effect on December 18, 2012, to the new energy descriptor. (42 U.S.C. 6295(e)(5)(E)(i)) In addition, pursuant to 42 U.S.C. 6295(e)(5)(E)(ii) and (iii), the conversion factor must not affect the minimum efficiency requirements for covered water heaters, including residential-duty commercial water heaters. Furthermore, such conversions must not lead to a change in measured energy efficiency for covered residential and residential-duty commercial water heaters manufactured and tested prior to the final rule establishing the uniform efficiency descriptor. Id. In the July 2014 test procedure final rule, DOE, among other things, established the UEF metric, a revised version of the current residential energy factor metric, as the uniform efficiency descriptor required by AEMTCA. 79 FR 40542, 40578-40579 (July 11, 2014). The uniform efficiency descriptor established in the July 2014 final rule applies to all commercial water heaters that meet the definition of “residential-duty commercial water heater.” This term was initially defined in the July 2014 final rule, and later revised in the November 2016 CWH TP final rule. 81 FR 79261, 79288-79289 (Nov. 10, 2016). Residential-duty commercial water heater is defined in 10 CFR 431.102 as any gas-fired storage, oil-fired storage, or electric instantaneous commercial water heater that meets the following conditions: (1) For models requiring electricity, uses single-phase external power supply; (2) Is not designed to provide outlet hot water at temperatures greater than 180 °F; and (3) Does not meet any of the criteria shown in Table III.1, which reflects the table in 10 CFR 431.102. Table III.1—Rated Input and Storage Volume Ranges for Non-Residential-Duty Commercial Water Heaters Water heater type Indicator of non-residential application Gas-fired storage Rated input >105 kBtu/h; Rated storage volume >120 gallons. Oil-fired storage Rated input >140 kBtu/h; Rated storage volume >120 gallons. Electric instantaneous Rated input >58.6 kW; Rated storage volume >2 gallons. CWH equipment not meeting the definition of “residential-duty commercial water heater” was deemed to be sufficiently characterized by the current thermal efficiency and standby loss metrics. DOE provided a method for converting existing thermal efficiency and/or standby loss ratings for residential-duty commercial water heaters to UEF in the December 2016 conversion factor final rule. DOE also adopted UEF standard levels for the equipment, and DOE's methodology for translating the standards ensured equivalent stringency between the then-existing standards (in terms of thermal efficiency and standby loss metrics) and the converted standards (in terms of UEF). 81 FR 96204, 96219-96223 (Dec. 29, 2016). Compliance with the UEF metric has been mandatory since December 29, 2016, and manufacturers have been required to determine UEF based on UEF test data, rather than using equations to convert from thermal efficiency and standby loss, since December 29, 2017. Therefore, in this NOPR, DOE analyzes residential-duty gas-fired storage water heaters in terms of UEF and does not utilize any UEF conversion factors. B. Scope of Rulemaking 1. Residential-Duty Commercial Water Heaters As discussed in the July 2014 final rule, DOE regulates residential-duty commercial water heaters as commercial water heaters. 79 FR 40542, 40544 (July 11, 2014) However, as discussed in section III.B.2 of this document, DOE is not considering amended standards for residential-duty oil-fired storage water heaters because DOE has initially found that the market for this equipment has not changed appreciably since standards were last amended. However, the same is not true for residential-duty gas-fired storage water heaters. DOE has tentatively determined that the market for residential-duty gas-fired storage water heaters has appreciably changed since the July 2014 final rule. DOE is considering amended energy conservation standards for residential-duty commercial gas-fired storage water heaters in the current rulemaking, which addresses commercial water heaters generally. As discussed in sections II.B and III.A of this document, DOE established that residential-duty commercial water heaters are covered by the new UEF metric in the July 2014 final rule. 79 FR 40542, 40586 (July 11, 2014). The analyses of residential-duty equipment for the withdrawn May 2016 CWH ECS NOPR were conducted in terms of the thermal efficiency and standby loss metrics because there were insufficient efficiency data in terms of UEF available when DOE undertook the analyses for the withdrawn May 2016 CWH ECS NOPR. 81 FR 34440, 34453. Those results were subsequently converted to the UEF metric in the December 2016 NODA. 81 FR 94234. However, data in terms of UEF have since become available; therefore, DOE updated the analysis of residential-duty equipment to be in terms of UEF for this NOPR. Details about the UEF levels analyzed in this NOPR are discussed in sections IV.C.4.c and IV.C.6 of this document. 2. Oil-Fired Commercial Water Heating Equipment ASHRAE Standard 90.1-2013 raised the thermal efficiency level for commercial oil-fired storage water heaters from 78 percent to 80 percent. In the July 2015 ASHRAE equipment final rule, DOE adopted the ASHRAE Standard 90.1 efficiency level of 80 percent having determined that there was insufficient potential for energy savings to justify further increasing the standard. 80 FR 42614 (July 17, 2015). This standard applied to both residential-duty commercial oil storage water heaters as well as non-residential-duty commercial oil storage water heaters at the time, although equivalent standards in terms of UEF were developed and adopted for residential-duty commercial gas storage water heaters in the December 2016 Conversion Factor Final Rule. 81 FR 96204 (Dec. 29, 2016). In considering amended efficiency standards for commercial oil-fired storage water heaters (including residential-duty oil-fired storage water heaters) in the withdrawn May 2016 CWH ECS NOPR, DOE initially determined that circumstances did not change appreciably between the publication of the July 2015 ASHRAE equipment final rule and the May 2016 CWH ECS NOPR, and, therefore, DOE did not analyze amended efficiency standards for this equipment in the May 2016 CWH ECS NOPR. 81 FR 34440, 34453. DOE has not received any new or additional information on this issue to suggest that DOE should consider amended standards for commercial oil-fired storage water heaters or residential-duty oil-fired storage water heaters and therefore DOE maintains the approach from the withdrawn May 2016 CWH ECS NOPR. For this NOPR, DOE considered whether amended standby loss standards for commercial oil-fired water heaters would be warranted. DOE has initially determined that a change in the maximum standby loss level would likely effect less of a change in energy consumption of oil-fired storage water heaters than would a change in the thermal efficiency due to the magnitude of energy consumed in active mode as compared to standby losses. Therefore, DOE has tentatively determined that an amended standby loss standard would likely result in only a negligible amount of additional energy savings. Thus, DOE has not analyzed amended standby loss standards for commercial oil-fired storage water heaters in this rulemaking. DOE also considered oil-fired instantaneous water heaters and hot water supply boilers and only identified a small number of oil-fired tank-type instantaneous units currently on the market that would meet DOE's definition of oil-fired tank-type instantaneous commercial water heaters. DOE estimates that there are very few annual shipments for this equipment class. Therefore, DOE has initially determined that the energy savings possible from amended standards for such equipment is negligible, and thus, would not impact the results of the analyses conducted for this NOPR. Therefore, DOE did not analyze amended standards for commercial oil-fired instantaneous water heaters and hot water supply boilers for this NOPR. Based on the discussion in the preceding paragraphs, and because DOE has not received new information to contradict its previous findings, DOE tentatively concludes that the potential energy savings resulting from amended standards for commercial oil-fired water heating equipment would be negligible. Any such energy savings from amended standards for commercial oil-fired water heating equipment would not appreciably change the absolute energy savings estimated for CWH equipment; i.e., would not impact the determination of whether amended energy conservation standards for CWH equipment would result in significant energy savings. Thus, DOE has continued to exclude commercial oil-fired water heating equipment from the analysis conducted for this NOPR. 3. Unfired Hot Water Storage Tanks Unfired hot water storage tanks are a class of CWH equipment. On August 9, 2019, DOE published an RFI initiating an effort to determine whether to amend the current uniform national standard for unfired hot water storage tanks. 84 FR 39220. Subsequently, on June 10, 2021 DOE published a notice of proposed determination and request for comment proposing not to amend energy conservation standards for unfired hot water storage tanks. 86 FR 30796. Because amended energy conservation standards for unfired hot water storage tanks are being considered as part of that proceeding, they were not considered further for this NOPR. 4. Electric Instantaneous Water Heaters EPCA prescribes energy conservation standards for several classes of CWH equipment manufactured on or after January 1, 1994. (42 U.S.C. 6313(a)(5)) DOE codified these standards in its regulations for CWH equipment at 10 CFR 431.110. However, when codifying these standards from EPCA, DOE inadvertently omitted the standards put in place by EPCA for electric instantaneous water heaters. Specifically, for instantaneous water heaters with a storage volume of less than 10 gallons, EPCA prescribes a minimum thermal efficiency of 80 percent. For instantaneous water heaters with a storage volume of 10 gallons or more, EPCA prescribes a minimum thermal efficiency of 77 percent and a maximum standby loss, in percent/hour, of 2.30 + (67/measured volume (in gallons)). (42 U.S.C. 6313(a)(5)(D) and (E)) Although DOE's regulations at 10 CFR 431.110 do not currently include energy conservation standards for electric instantaneous water heaters, these standards prescribed in EPCA are applicable. Therefore, in this NOPR, DOE is proposing to codify these standards in its regulations at 10 CFR 431.110. DOE is also proposing to allow use of a calculation-based method for determining storage volume of electric instantaneous water heaters that is the same as the method for gas-fired and oil-fired instantaneous water heaters and hot water supply boilers found at 10 CFR 429.72(e) (added at 81 FR 79261, 79320 (Nov. 10, 2016)). DOE has initially concluded that the same rationale for including these provisions for gas-fired and oil-fired instantaneous water heaters and hot water supply boilers also applies to electric instantaneous water heaters ( i.e., it may be difficult to completely empty the instantaneous water heater in order to obtain a dry weight measurement, which is needed in a weight-based test for an accurate representation of the storage volume). Therefore, DOE is proposing to include electric instantaneous water heaters in these provisions in order to provide manufacturers with flexibility as to how the storage volume is determined. DOE notes that because electric instantaneous water heaters typically use electric resistance heating elements, which are highly efficient, the thermal efficiency of these units already approaches 100 percent. DOE has also tentatively determined that there are no options for substantially increasing the rated thermal efficiency of this equipment, and the impact of setting thermal efficiency energy conservation standards for these products would be negligible. Similarly, the stored water volume is typically low, resulting in limited potential for reducing standby losses for most electric instantaneous water heaters. As a result, amending the standards for electric instantaneous water heaters established in EPCA would result in minimal energy savings. Even if DOE were to account for the energy savings potential of amended standards for electric instantaneous water heaters, the contribution of any potential energy savings from amended standards for these units would be negligible and not appreciably impact the energy savings analysis for CWH equipment. Therefore, DOE did not analyze amended energy conservation standards for electric instantaneous water heaters. 5. Commercial Heat Pump Water Heaters In the withdrawn May 2016 CWH ECS NOPR, DOE did not consider energy conservation standards for commercial heat pump water heaters because DOE's proposed test procedure for commercial heat pump water heaters was not finalized, and there were insufficient data with the proposed test procedure for units currently on the market. DOE expressed its intent to consider energy conservation standards for commercial heat pump water heaters in a future rulemaking. 81 FR 34440, 34454-34455 (May 31, 2016). Further, DOE noted that all commercial heat pump water heaters it had identified on the market were “add-on” heat pumps designed to be paired with a storage tank in the field, and DOE had not identified any commercial water heater models that integrate a storage tank and heat pump. DOE did not consider commercial integrated heat pump water heaters as a design option for electric storage water heaters because DOE did not identify any such units on the market. 81 FR 34440, 34454 and 34469. In the November 2016 CWH TP final rule, DOE adopted a test procedure for commercial heat pump water heaters. 81 FR 79261, 79301-79304. However, DOE has initially concluded that there are still limited data using this test procedure for units currently on the market due to limited units on the market. Since the November 2016 CWH TP DOE is aware of only one commercial integrated heat pump water heater model currently on the market. Therefore, DOE did not consider energy conservation standards for commercial heat pump water heaters in this NOPR. As stated in the withdrawn May 2016 CWH ECS NOPR, DOE plans to analyze standards for commercial heat pump water heaters in a future rulemaking, at which time DOE will consider the appropriate equipment class structure for commercial electric water heaters, including commercial heat pump water heaters. Section IV.A.2.f of this NOPR includes discussion of DOE's consideration of grid-enabled water heaters. 6. Electric Storage Water Heaters In this rulemaking, DOE is not analyzing thermal efficiency standards for electric storage water heaters. Electric storage water heaters are not currently subject to a thermal efficiency standard under 10 CFR 431.110. Electric storage water heaters typically use electric resistance heating elements, which are highly efficient. The thermal efficiency of these units already approaches 100 percent. DOE did not consider commercial integrated heat pump water heaters as the maximum technologically feasible (“max-tech”) for electric storage water heaters at this time. DOE found only one such model on the market, at a single storage volume and heating capacity. Given the wide range of capacities and stored water volumes in products currently on the market, which are required to meet hot water loads in commercial buildings, it is unclear based on this single model whether heat pump water heater technology would be suitable to meet the range of load demands on the market. Issue 2: DOE requests comment and information on whether integrated heat pump water heaters are capable of meeting the same hot water loads as commercial electric storage water heaters that use electric resistance elements. Although DOE did not consider an integrated heat pump water heater as a design option for electric storage water heaters, DOE proposed amended standby loss standards for electric storage water heaters in the withdrawn May 2016 CWH ECS NOPR based on increased insulation thickness. 81 FR 34440, 34443 (May 31, 2016). In response to the withdrawn May 2016 CWH ECS NOPR, DOE received several comments opposing the proposed amended standby loss standard for electric storage water heaters. Summaries of these comments and DOE's responses are included in section IV.C.4.b of this NOPR. After consideration of industry comments and closer examination of the market, DOE recognizes that the only technology option that DOE analyzed in the engineering analysis as providing standby loss reduction for electric storage water heaters ( i.e., increasing tank foam insulation thickness to 3 inches) is already currently included in some models rated at or near the current standby loss standard. Consequently, DOE did not analyze any technology options for reducing standby loss below ( i.e., more stringent than) the current standard, and therefore, this NOPR does not propose to amend the standby loss standard for electric storage water heaters. Section IV.C.4.b of this NOPR includes further discussion of standby loss levels for electric storage water heaters and DOE's decision not to amend standby loss standards for electric storage water heaters. 7. Instantaneous Water Heaters and Hot Water Supply Boilers Other than storage-type instantaneous water heaters, DOE did not include instantaneous water heaters and hot water supply boilers in its analysis of potential amended standby loss standards. 16 Instantaneous water heaters and hot water supply boilers (other than storage-type instantaneous water heaters) with greater than 10 gallons of water stored have a standby loss requirement under 10 CFR 431.110. However, DOE did not analyze more stringent standby loss standards for these units because it has initially determined that such amended standards would result in minimal energy savings. DOE identified only 81 out of 468 models on the market of instantaneous water heaters or hot water supply boilers with greater than or equal to 10 gallons of water stored (other than storage-type instantaneous water heaters), and 32 of the identified models have less than 15 gallons of water stored. Even if DOE were to account for the energy savings potential of amended standby loss standards for instantaneous water heaters and hot water supply boilers (other than storage-type instantaneous water heaters) with greater than 10 gallons of water stored CWH equipment, the contribution of any potential energy savings from amended standards for these units would be negligible and not appreciably impact the energy savings analysis for CWH equipment. 16 DOE adopted a definition for “storage-type instantaneous water heater” in the November 2016 CWH TP final rule. 81 FR 79261, 79289-79290 (Nov. 10, 2016). Storage-type instantaneous water heaters are discussed in section IV.A.2.b of this NOPR. DOE has initially determined that instantaneous water heaters (other than storage-type instantaneous water heaters) and hot water supply boilers with less than 10 gallons of water stored would not have significantly different costs and benefits as compared to instantaneous water heaters (other than storage-type instantaneous water heaters) and hot water supply boilers with greater than or equal to 10 gallons of water stored. Therefore, DOE analyzed both equipment classes of instantaneous water heaters and hot water supply boilers (less than 10 gallons and greater than or equal to 10 gallons stored volume) together for thermal efficiency standard levels in this NOPR. DOE also initially determined that establishing standby loss standards for instantaneous water heaters and hot water supply boilers with less than or equal to 10 gallons water stored would result in minimal energy savings. Even if DOE were to account for the energy savings potential of amended standby loss standards for instantaneous water heaters and hot waters supply boilers with less than or equal to 10 gallons of water stored, the contribution any potential energy savings from amended standards for these units would be negligible and not appreciably impact the energy savings analysis for CWH equipment. For instantaneous water heaters and hot water supply boilers (other than storage-type instantaneous water heaters), DOE has not found and did not receive any information or data suggesting that DOE should analyze amended standby loss standards or separately analyze amended thermal efficiency standards for each stored volume range (less than 10 gallons, and greater than or equal to 10 gallons stored volume). C. Technological Feasibility 1. General In each energy conservation standards rulemaking, DOE conducts a screening analysis based on information gathered on all current technology options and prototype designs that could improve the efficiency of the products or equipment that is 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 these means for improving efficiency are technologically feasible. DOE considers technologies incorporated in commercially-available equipment or in working prototypes to be technologically feasible. After DOE has determined that particular technology options are technologically feasible, it further evaluates each technology option in light of the following additional screening criteria: (1) Practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; and (3) adverse impacts on health or safety. See generally 10 CFR 431.4; 10 CFR part 430, subpart C, appendix A, sections 6(c)(3)(ii)-(v) and 7(b)(2)-(5). Additionally, it is DOE's policy not to include in its analyses any proprietary technology that is a unique pathway to achieving a certain efficiency level. Section IV.B of this document discusses the results of the screening analysis for CWH equipment, particularly the designs DOE considered, those it screened out, and those that are the basis for the standard levels considered in this proposed rulemaking. For further details on the screening analysis for this proposed rulemaking, see chapter 4 of the NOPR TSD. 2. Maximum Technologically Feasible Levels When DOE proposes to adopt an amended standard for a type or class of covered equipment, it determines the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for such equipment. Accordingly, in the engineering analysis, DOE determined the max-tech improvements in energy efficiency for CWH equipment, using the design parameters for the most efficient products available on the market. The max-tech levels that DOE determined for this proposed rulemaking are described in section IV.C.4 of this NOPR and chapter 5 of the NOPR TSD. D. Energy Savings 1. Determination of Savings For each TSL, DOE projected energy savings from the application of the TSL to CWH equipment purchased in the 30-year period that begins in the first full year of compliance with potential standards (2026-2055 for gas-fired CWH equipment). 17 The savings are measured over the entire lifetime of CWH equipment purchased in the previous 30-year period. DOE quantified the energy savings attributable to each TSL as the difference in energy consumption between each standards case and the no-new-standards case. The no-new-standards case represents a projection of energy consumption that reflects how the market for a product would likely evolve in the absence of amended energy conservation standards. 17 DOE also presents a sensitivity analysis that considers impacts for equipment shipped in a 9-year period. DOE used its national impacts analysis (“NIA”) spreadsheet model to estimate national energy savings (“NES”) from potential amended standards for CWH equipment. The NIA spreadsheet model (described in section IV.H of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by equipment at the locations where they are used. For electricity, DOE reports NES in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For natural gas, the primary energy savings are considered to be equal to the site energy savings because they are supplied to the user without transformation from another form of energy. DOE also calculates NES in terms of full-fuel cycle (“FFC”) energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels ( e.g., coal, natural gas, petroleum fuels), and thus presents a more complete picture of the impacts of energy conservation standards. 18 DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered equipment. 19 For more information on FFC energy savings, see section IV.H.3 of this document. 18 The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug. 17, 2012). 19 Natural gas and electricity were the energy types analyzed in the FFC calculations. 2. Significance of Savings To adopt any new or amended standards for covered equipment, DOE must determine that such action would result in significant energy savings. (See 42 U.S.C. 6313(a)(6)(C)(i); 42 U.S.C. 6313(a)(6)(A)(ii)(II)) 20 20 In setting a more stringent standard for ASHRAE equipment, DOE must have “clear and convincing evidence” that doing so “would result in significant additional conservation of energy” in addition to being technologically feasible and economically justified. 42 U.S.C. 6313(a)(6)(A)(ii)(II). This language indicates that Congress had intended for DOE to ensure that, in addition to the savings from the ASHRAE standards, DOE's standards would yield additional energy savings that are significant. In DOE's view, this statutory provision shares the requirement with the statutory provision applicable to covered products and non-ASHRAE equipment that “significant conservation of energy” must be present (42 U.S.C. 6295(o)(3)(B))—and supported with “clear and convincing evidence”—to permit DOE to set a more stringent requirement than ASHRAE. The significance of energy savings offered by a new or amended energy conservation standard cannot be determined without knowledge of the specific circumstances surrounding a given rulemaking. 21 For example, the United States has now rejoined the Paris Agreement and will exert leadership in confronting the climate crisis. 22 Additionally, some covered products and equipment have most of their energy consumption occur during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than products with relatively constant demand. In evaluating the significance of energy savings, DOE considers differences in primary energy and FFC effects for different covered products and equipment when determining whether energy savings are significant. Primary energy and FFC effects include the energy consumed in electricity production (depending on load shape), in distribution and transmission, and in extracting, processing, and transporting primary fuels ( i.e., coal, natural gas, petroleum fuels), and thus present a more complete picture of the impacts of energy conservation standards. 21 The numeric threshold for determining the significance of energy savings established in a final rule published on February 14, 2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule published on December 13, 2021 (86 FR 70755). 22 See Executive Order 14008, 86 FR 7619 (Feb. 1, 2021) (“Tackling the Climate Crisis at Home and Abroad”). Accordingly, DOE evaluates the significance of energy savings on a case-by-case basis, taking into account the significance of cumulative FFC national energy savings, the cumulative FFC emissions reductions, and the need to confront the global climate crisis, among other factors. As stated, the proposed standards would result in estimated national energy savings of 0.70 quad, the equivalent of the electricity use of 7.0 million homes in one year. DOE has initially determined, based on the methodology described in section IV.E and the analytical results presented in section V.B.3.a, that there is clear and convincing evidence that the energy savings for the TSL proposed in this rulemaking are “significant” within the meaning of 42 U.S.C. 6313(a)(6)(A)(ii)(II). E. Economic Justification 1. Specific Criteria EPCA provides seven factors to be evaluated in determining whether a potential energy conservation standard for CWH equipment is economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)(I)-(VII) and (C)(i)) The following sections discuss how DOE has addressed each of those seven factors in this rulemaking. a. Economic Impact on Manufacturers and Commercial Consumers EPCA requires DOE to consider the economic impact of a standard on manufacturers and the commercial consumers of the products subject to the standard. (42 U.S.C. 6313(a)(6)(B)(I) and (C)(i)) In determining the impacts of a potential amended standard on manufacturers, DOE typically conducts an MIA. For the MIA, DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step incorporates both a short-term impact 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 impact assessment (over a 30-year period). 23 The industry-wide impacts analyzed include: (1) INPV, which values the industry on the basis of expected future cash flows; (2) cash flows by year; (3) changes in revenue and income; and (4) other measures of impact, as appropriate. Second, DOE analyzes and reports the impacts on different types of manufacturers (manufacturer subgroups), 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 new and amended 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. 23 DOE also presents a sensitivity analysis that considers impacts for equipment shipped in a 9-year period, which is a proxy for the timeline in EPCA for the review of certain energy conservation standards and potential revision of and compliance with such revised standards. For individual commercial consumers, measures of economic impact include the changes in LCC and PBP associated with new or amended standards. These measures are discussed further in the following section. For commercial 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 commercial consumers that may be affected disproportionately by a national standard. b. Savings in Operating Costs Compared to Increase in Price (Life-Cycle Costs) EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of CWH equipment compared to any increase in the price of the equipment that is likely to result from the standard. (42 U.S.C. 6313(a)(6)(B)(ii)(II); 42 U.S.C. 6313(a)(6)(C)(i)) DOE conducts this comparison in its LCC and PBP analysis. The LCC is the sum of the purchase price of a piece of equipment (including installation cost and sales tax) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment. To account for uncertainty and variability in specific inputs, such as equipment lifetime and discount rate, DOE uses distributions of values, with probabilities attached to each value. For its analysis, DOE assumes that commercial consumers will purchase the covered equipment in the first full year of compliance with amended standards. The PBP is the estimated amount of time (in years) it takes consumers to recover the increased purchase cost (including installation) of a more-efficient equipment through lower operating costs. DOE calculates the PBP by dividing the change in purchase cost due to a more-stringent standard by the change in annual operating cost for the year that standards are assumed to take effect. The LCC savings are calculated relative to a no-new-standards case that reflects projected market trends in the absence of amended standards. DOE identifies the percentage of commercial consumers estimated to receive LCC savings or experience an LCC increase, in addition to the average LCC savings associated with a particular standard level. DOE's LCC analysis is discussed in further detail in section IV.F of this NOPR. c. Energy Savings Although significant conservation of energy is a separate statutory requirement for adopting an energy conservation standard, EPCA requires DOE, in determining the economic justification of a standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6313(a)(6)(B)(ii)(III)) As discussed in section IV.H of this NOPR and chapter 10 of the NOPR TSD, DOE uses the NIA spreadsheet to project NES. d. Lessening of Utility or Performance of Products In establishing classes of equipment, and in evaluating design options and the impact of potential standard levels, DOE must consider any lessening of the utility or performance of the considered equipment likely to result from the standard. (42 U.S.C. 6313(a)(6)(B)(ii)(IV)) Based on data available to DOE, the standards proposed in this document would not reduce the utility or performance of the products under consideration in this rulemaking. As discussed in section IV.A.2.c, DOE considered whether different venting technologies should be considered a necessary feature. Although the standards proposed in this NOPR would, if adopted, effectively eliminate non-condensing technology (and associated venting), DOE has recently published a final interpretive rule that returns to the previous and long-standing interpretation (in effect prior to the January 15, 2021 final interpretive rule), under which the technology used to supply heated air or hot water is not a performance-related “feature” that provides a distinct utility under EPCA. 86 FR 73947 (Dec. 29, 2021). Therefore, for the purpose of the analysis conducted for this rulemaking DOE is not precluded from setting energy conservation standards that preclude non-condensing technology and did not analyze separate equipment classes for non-condensing and condensing CWH equipment in this NOPR. e. Impact of Any Lessening of Competition EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a proposed standard. ( See 42 U.S.C. 6313(a)(6)(B)(ii)(V)) DOE will transmit a copy of this proposed rule to the Attorney General with a request that the DOJ provide its determination on this issue. DOE will publish and respond to the Attorney General's determination in the final rule. DOE invites comment from the public regarding the competitive impacts that are likely to result from this proposed rule. In addition, stakeholders may also provide comments separately to DOJ regarding these potential impacts. See the ADDRESSES section for information to send comments to DOJ. f. Need for National Energy Conservation DOE also considers the need for national energy conservation in determining whether a new or amended standard is economically justified. (42 U.S.C. 6313(a)(6)(B)(ii)(VI)) The energy savings from the proposed standards are likely to provide improvements to the security and reliability of the Nation's energy system. DOE conducts a utility impact analysis to estimate how standards may affect the Nation's needed power generation capacity, as discussed in section IV.M of this document. DOE maintains that environmental and public health benefits associated with the more efficient use of energy are important to take into account when considering the need for national energy conservation. The proposed standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and GHGs associated with energy production and use. As part of the analysis of the need for national energy and water conservation, DOE conducts an emissions analysis to estimate how potential standards may affect these emissions, as discussed in section IV.K of this document; the estimated emissions impacts are reported in section V.B.6 of this document. 24 DOE also estimates the economic value of emissions reductions resulting from the considered TSLs, as discussed in section IV.L of this document. DOE emphasizes that the SC-GHG analysis presented in this NOPR and TSD was performed in support of the cost-benefit analyses required by Executive Order 12866, and is provided to inform the public of the impacts of emissions reductions resulting from this proposed rule. The SC-GHG estimates were not factored into DOE's EPCA analysis of the need for national energy and water conservation. 24 As discussed in section IV.L of this document, for the purpose of complying with the requirements of Executive Order 12866, DOE also estimates the economic value of emissions reductions resulting from the considered TSLs. DOE calculates this estimate using a measure of the social cost (“SC”) of each pollutant ( e.g., SC-CO 2 ). Although this estimate is calculated for the purpose of complying with Executive Order 12866, the Seventh Circuit Court of Appeals confirmed in 2016 that DOE's consideration of the social cost of carbon in energy conservation standards rulemakings is permissible under EPCA. Zero Zone v. Dept of Energy, 832 F.3d 654, 678 (7th Cir. 2016). 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. 6313(a)(6)(B)(ii)(VII) and (C)(i)) DOE did not consider other factors for this document. 2. Rebuttable Presumption 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 potential amended energy conservation standards would have on the PBP for commercial consumers. These analyses include, but are not limited to, the 3-year PBP contemplated under the rebuttable-presumption test. In addition, DOE routinely conducts an economic analysis that considers the full range of impacts to commercial consumers, manufacturers, the Nation, and the environment, as required under 42 U.S.C. 6313(a)(6)(B)(ii) and 42 U.S.C. 6313(a)(6)(C)(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 V.B.1.c of this document. F. Revisions to Notes in Regulatory Text In the withdrawn May 2016 CWH ECS NOPR, DOE proposed to modify the three notes to the table of energy conservation standards in 10 CFR 431.110. 81 FR 34440, 34458 (May 31, 2016). First, DOE proposed to modify the note to the table of energy conservation standards denoted by subscript “a” to maintain consistency with DOE's procedure and enforcement provisions for determining fuel input rate of gas-fired and oil-fired CWH equipment that were proposed in the May 2016 CWH TP NOPR (81 FR 28588, 28622 (May 9, 2016)). Among these changes, DOE proposed that the fuel input rate certified to DOE, which must be equal to the mean of the measured values of fuel input rate in a sample, be used to determine equipment classes and calculate the standby loss standard. Therefore, in the withdrawn May 2016 CWH ECS NOPR, DOE proposed to replace the term “nameplate input rate” with the term “fuel input rate.” 81 FR 34440, 34458 (May 31, 2016). DOE also proposed to remove the note to the table of energy conservation standards denoted by subscript “b.” This note clarifies the compliance date for energy conservation standards for hot water supply boilers with capacity less than 10 gallons. Specifically, the note says that the standards in the table are mandatory for such equipment beginning on October 21, 2005, but that between October 23, 2003 and October 21, 2005 manufacturers may either comply with the standards listed in the table for hot water supply boilers with less than 10 gallons of storage or with the standards in subpart E of 10 CFR part 431 for a “commercial packaged boiler.” DOE determined that this note is no longer needed because the specific compliance dates for hot water supply boilers with less than 10 gallons of storage is well in the past, with all such equipment being required to meet the standards in the table in 10 CFR 431.110 since October 21, 2005. Id. DOE also proposed to modify the note to the table of energy conservation standards denoted by subscript “c,” which establishes design requirements for water heaters and hot water supply boilers having more than 140 gallons of storage capacity that do not meet the standby loss standard. DOE proposed to replace the phrase “fire damper” with the phrase “flue damper,” because “flue damper” was more consistent with commonly used terminology and likely the intended meaning, and that “fire damper” was a typographical error. 25 The intent of this design requirement was to require that any water heaters or hot water supply boilers greater than 140 gallons that do not meet the standby loss standard must have some device that physically restricts heat loss through the flue, either a flue damper or blower that sits atop the flue. Id. 25 In the January 2001 final rule, DOE used the terminology “flue damper” in the footnote to the standards table. 66 FR 3356. The October 2004 final rule, which recodified the existing standards to be contiguous with newly adopted test procedures, changed the footnote terminology to “fire damper” without providing rationale. 69 FR 61985. Further, ASHRAE Standard 90.1 has consistently used the term “flue damper” to describe the requirements. Therefore, DOE concluded the change in the October 2004 final rule was likely inadvertent. In response to the withdrawn May 2016 CWH ECS NOPR, A.O. Smith and Rheem opposed DOE's proposal to replace the term “nameplate input rate” with “fuel input rate.” A.O. Smith argued that because input rate is one of the characteristics that define a product's DOE classification, a fixed number such as the nameplate rated input is necessary. A.O. Smith stated that manufacturers are required by safety standards to display the rated input on product labels and operating instructions. A.O. Smith also argued that the only role for rated input during efficiency testing is to ensure the unit is firing on rate, and that rated input has no effect on measurement of energy efficiency. A.O. Smith added that replacing the term with “fuel input rate” does not help consumers but will add regulatory burden to manufacturers. Rheem disagreed with the method for determining “fuel input rate” proposed in the May 2016 CWH TP NOPR and believes that the term “nameplate input rate” is clear and consistent for all water heaters and is should remain in subscript “a.” Rheem stated that it would only support a change to the term “fuel input rate” if the method of determining fuel input rate remains unchanged from how it is currently performed in industry. (A.O. Smith, No. 39 at pp. 6-7; Rheem, No. 43 at p. 8) In the November 2016 CWH TP final rule, DOE did not adopt its proposed certification provisions for fuel input rate. DOE stated that the safety certification process during the design and development of CWH equipment is sufficient for determining the rated input for CWH equipment. Additionally, DOE adopted the term “rated input” to mean the maximum rate at which CWH equipment is rated to use energy as specified on the nameplate and adopted the term “fuel input rate” to mean the rate at which any particular unit of CWH equipment consumes energy during testing. 81 FR 79261, 79304-79306 (Nov. 10, 2016). To maintain consistency with the November 2016 CWH TP final rule, DOE is no longer proposing to adopt its proposal in the May 2016 CWH ECS NOPR to replace the term “nameplate input rate” with the term “fuel input rate.” Instead, DOE is proposing to replace the term “nameplate input rate” with the term “rated input.” DOE notes that this change simply ensures consistency in nomenclature throughout DOE's regulations for CWH equipment. Similar to the term “nameplate input rate,” the term “rated input” also refers to the input rate specified on the nameplate of CWH equipment. Additionally, in this NOPR, DOE continues to propose the other revisions initially proposed in the May 2016 CWH ECS NOPR to subscript “b” and “c” of 10 CFR 431.110 for the reasons previously stated. Issue 3: DOE requests comment on its proposed revisions to notes to the table of energy conservation standards in 10 CFR 431.110. G. Certification, Compliance, and Enforcement Issues In the withdrawn May 2016 CWH ECS NOPR, DOE proposed to add requirements to its certification, compliance, and enforcement regulations at 10 CFR 429.44 that the rated value of storage volume must equal the mean of the measured storage volume of the units in the sample. 81 FR 34440, 34458 (May 31, 2016). DOE notes that there are currently no requirements from the Department limiting the amount of difference that is allowable between the tested ( i.e., measured) storage volume and the “rated” storage volume that is specified by the manufacturer for CWH equipment other than residential-duty commercial water heaters. In the July 2014 test procedure final rule, DOE established a requirement for consumer water heaters and residential-duty commercial water heaters that requires the rated volume to be equal to the mean of the measured volumes in a sample. 79 FR 40542, 40565 (July 11, 2014). From examination of reported measured storage volume data in the AHRI Directory, DOE observed that many units are rated at storage volumes above the measured storage volume. DOE's maximum standby loss equations for gas-fired and oil-fired CWH equipment are based on the rated storage volume, and the maximum standby loss standard increases as rated storage volume increases. Consequently, DOE proposed to require that the rated storage volume must be equal to the mean of the values measured using DOE's test procedure. In addition, DOE proposed to specify that for DOE-initiated testing, the [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%3A2022-10011. Public record. Not legal advice.