# Energy Conservation Program: Energy Conservation Standards for Oil, Electric, and Weatherized Gas Consumer Furnaces

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2024-23906

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** October 18, 2024
- **Citation:** 89 FR 84028

## Text

DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2021-BT-STD-0031]
RIN 1904-AF19
Energy Conservation Program: Energy Conservation Standards for Oil, Electric, and Weatherized Gas Consumer Furnaces

AGENCY:

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

ACTION:

Final determination.

SUMMARY:

The Energy Policy and Conservation Act, as amended (“EPCA”), prescribes energy conservation standards for various consumer products and certain commercial and industrial equipment, including non-weatherized oil-fired furnaces (“NWOFs”), mobile home oil-fired furnaces (“MHOFs”), weatherized gas furnaces (“WGFs”), weatherized oil-fired furnaces (“WOFs”), and electric furnaces (“EFs”). EPCA also requires the U.S. Department of Energy (“DOE”) to periodically review its existing standards to determine whether more-stringent, amended standards would be technologically feasible and economically justified, and would result in significant energy savings. In this final determination, DOE has determined that the energy conservation standards for EFs, NWOFs, MHOFs, WOFs, and WGFs do not need to be amended.

DATES:

The effective date of this final determination is November 18, 2024.

ADDRESSES:

The docket for this activity, which includes
Federal Register
notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at
www.regulations.gov.
All documents in the docket are listed in the
www.regulations.gov
index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.

The docket web page can be found at
www.regulations.gov/docket/EERE-2021-BT-STD-0031.
The docket web page contains instructions on how to access all documents, including public comments, in the docket.

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. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 586-4798. Email:
Eric.Stas@hq.doe.gov.

For further information on how to review the docket, contact the Appliance and Equipment Standards Program staff at (202) 287-1445 or by email:
ApplianceStandardsQuestions@ee.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Synopsis of the Final Determination

II. Introduction

A. Authority

B. Background

1. Current Standards

2. Current Rulemaking History

III. General Discussion and Rationale

A. General Comments

1. Comments Supporting Proposed Determination

2. Comments Opposing Proposed Determination

3. Other Topics

B. Scope of Coverage and Product Classes

C. Test Procedure

D. Standby Mode and Off Mode

E. Technological Feasibility

1. General Considerations

2. Maximum Technologically Feasible Levels

F. Energy Savings

1. Determination of Savings

2. Significance of Savings

G. Cost-Effectiveness

H. Further Considerations

1. Economic Impact on Manufacturers and Consumers

2. Savings in Operating Costs Compared To Increase in Price

3. Energy Savings

4. Lessening of Utility or Performance of Products

5. Impact of Any Lessening of Competition

6. Need for National Energy Conservation

7. Other Factors

IV. Methodology and Discussion of Related Comments

A. Market and Technology Assessment

1. Scope of Coverage

a. Electric Furnaces

b. Weatherized Oil-Fired Furnaces

2. Product Classes

3. Technology Options

4. Screening Analysis

a. Screened-Out Technologies

b. Remaining Technologies

5. Impact From Other Rulemakings

B. Engineering and Cost Analysis

1. Efficiency Analysis

a. Baseline Efficiency

b. Intermediate Efficiency Levels

c. Maximum Technology (“Max-Tech”) Efficiency Levels

d. Summary of Efficiency Levels Analyzed

2. Cost Analysis

a. Teardown Analysis

b. Cost Estimation Method

3. Cost-Efficiency Results

C. Markups Analysis

D. Energy Use Analysis

E. Life-Cycle Cost and Payback Period Analysis

1. Product Cost

2. Installation Cost

3. Annual Energy Consumption

4. Energy Prices

5. Maintenance and Repair Costs

6. Product Lifetime

7. Discount Rates

8. Energy Efficiency Distribution in the No-New-Standards Case

9. Payback Period Analysis

F. Shipments Analysis

G. National Impact Analysis

1. Product Efficiency Trends

2. National Energy Savings

3. Net Present Value Analysis

V. Analytical Results and Conclusions

A. Economic Impacts on Individual Consumers

B. National Impact Analysis

1. National Energy Savings

2. Net Present Value of Consumer Costs and Benefits

C. Final Determination

1. Technological Feasibility

2. Cost-Effectiveness

3. Significant Conservation of Energy

4. Further Considerations

a. Oil Furnaces

b. Weatherized Gas Furnaces

5. Summary

VI. Procedural Issues and Regulatory Review

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

B. Review Under the Regulatory Flexibility Act

C. Review Under the Paperwork Reduction Act of 1995

D. Review Under the National Environmental Policy Act of 1969

E. Review Under Executive Order 13132

F. Review Under Executive Order 12988

G. Review Under the Unfunded Mandates Reform Act of 1995

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

I. Review Under Executive Order 12630

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

K. Review Under Executive Order 13211

L. Review Under the Information Quality Bulletin for Peer Review

M. Congressional Notification

VII. Approval of the Office of the Secretary

I. Synopsis of the Final Determination

The Energy Policy and Conservation Act, Public Law 94-163, as amended (“EPCA”),
1

authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291-6317, as codified) Title III, Part B of

EPCA
2

established the Energy Conservation Program for Consumer Products Other Than Automobiles. (42 U.S.C. 6291-6309) These products include oil, electric, and weatherized gas consumer furnaces, the subject of this final determination. (42 U.S.C. 6292(a)(5))

1
All references to EPCA in this document refer to the statute as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 27, 2020), which reflects the last statutory amendments that impact Parts A and A-1 of EPCA.

2
For editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A.

Pursuant to EPCA, DOE is required to review its existing energy conservation standards for covered consumer products no later than six years after issuance of any final rule establishing or amending a standard. (42 U.S.C. 6295(m)(1)) Pursuant to that statutory provision, DOE must publish either a notification of determination that standards for the product do not need to be amended, or a notice of proposed rulemaking (“NOPR”) including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (
Id.
) DOE has conducted this review of the energy conservation standards for oil, electric, and weatherized gas consumer furnaces under EPCA's six-year-lookback authority described herein.

For this final determination, DOE analyzed oil, electric, and weatherized gas consumer furnaces subject to energy conservation standards specified in the Code of Federal Regulations (“CFR”) at 10 CFR 430.32(e)(1). DOE first analyzed the technological feasibility of more energy-efficient oil, electric, and weatherized gas furnaces and determined that amended standards for electric furnaces are not technologically feasible. For those oil and weatherized gas furnaces for which DOE determined higher standards to be technologically feasible, DOE evaluated whether higher standards would be cost-effective by conducting life-cycle cost (“LCC”) and payback period (“PBP”) analyses. In addition, DOE estimated energy savings that would result from potential energy conservation standards by conducting a national impacts analysis (“NIA”), in which it estimated the net present value (“NPV”) of the total costs and benefits experienced by consumers.

Based on the results of the analyses, summarized in section V of this document, DOE has determined that the current standards for oil, electric, and weatherized gas furnaces do not need to be amended and is issuing this final determination accordingly.

II. Introduction

The following sections briefly discuss the statutory authority underlying this final determination, as well as some of the historical background relevant to the establishment of energy conservation standards for oil, electric, and weatherized gas furnaces.

A. Authority

Among other things, EPCA authorizes DOE to regulate the energy efficiency of a number of consumer products and certain industrial equipment. (42 U.S.C. 6291-6317, as codified) Title III, Part B of EPCA
3

established the Energy Conservation Program for Consumer Products Other Than Automobiles. These products include consumer furnaces, the subject of this document. (42 U.S.C. 6292(a)(5))

3
As noted previously, for editorial reasons, upon codification in the U.S. Code, Part B was redesignated Part A.

The energy conservation program under EPCA consists essentially of four parts: (1) testing, (2) labeling, (3) the establishment of Federal energy conservation standards, and (4) certification and enforcement procedures. Relevant provisions of EPCA specifically include definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy conservation standards (42 U.S.C. 6295), and the authority to require information and reports from manufacturers (42 U.S.C. 6296).

Federal energy efficiency requirements for covered products established under EPCA generally supersede State laws and regulations concerning energy conservation testing, labeling, and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal preemption in limited circumstances for particular State laws or regulations, in accordance with the procedures and other provisions set forth under EPCA. (42 U.S.C. 6297(d))

Subject to certain criteria and conditions, DOE is required to develop test procedures to measure the energy efficiency, energy use, or estimated annual operating cost of each covered product. (42 U.S.C. 6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products must use the prescribed DOE test procedure as the basis for certifying to DOE that their product complies with the applicable energy conservation standards and as the basis for any representations regarding the energy use or energy efficiency of the product. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly, DOE must use these test procedures to evaluate whether a basic model complies with the applicable energy conservation standard(s). (42 U.S.C. 6295(s)) The DOE test procedures for consumer furnaces appear at title 10 of the Code of Federal Regulations (“CFR”) part 430, subpart B, appendix N.

EPCA prescribed energy conservation standards for consumer furnaces (42 U.S.C. 6295(f)(1)-(2)) and directed DOE to conduct future rulemakings to determine whether to amend these standards. (42 U.S.C. 6295(f)(4) and 42 U.S.C. 6295(m)(1)) As explained in section II.B of this document, DOE has completed its rulemaking obligations pursuant to EPCA under 42 U.S.C. 6295(f)(4) for the subject consumer furnaces. However, DOE has ongoing rulemaking obligations under 42 U.S.C. 6295(m)(1) (
i.e.,
the six-year-lookback review requirement). More specifically, and as noted previously, not later than six years after the issuance of any final rule establishing or amending a standard, DOE must publish either a notice of proposed determination (“NOPD”) that standards for the product do not need to be amended, or a NOPR including new proposed energy conservation standards (proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(1) and (3)) DOE must make the analysis on which a NOPD or NOPR is based publicly available and provide an opportunity for written comment. (42 U.S.C. 6295(m)(2))

A determination that amended standards are not needed must be based on consideration of whether amended standards will result in significant conservation of energy, are technologically feasible, and are cost-effective. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2)) Additionally, any new or amended energy conservation standard prescribed by the Secretary for any type (or class) of covered product shall be designed to achieve the maximum improvement in energy efficiency which the Secretary determines is technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Among the factors DOE considers in evaluating whether a proposed standard level is economically justified includes whether the proposed standard at that level is cost-effective, as defined under 42 U.S.C. 6295(o)(2)(B)(i)(II). Under 42 U.S.C. 6295(o)(2)(B)(i)(II), an evaluation of cost-effectiveness requires DOE to consider savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products that are likely to result from the standard. (42 U.S.C. 6295(n)(2) and 42 U.S.C. 6295(o)(2)(B)(i)(II))

Finally, pursuant to the amendments to EPCA contained in the Energy Independence and Security Act of 2007 (“EISA 2007”), Public Law 110-140, any final rule for new or amended energy conservation standards promulgated after July 1, 2010, is required to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts a standard for a covered product after that date, it must, if justified by the criteria for adoption of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and off mode energy use into a single standard, or, if that is not feasible, adopt a separate standard for such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedures and standards for oil, electric, and weatherized gas furnaces address standby mode and off mode energy use. DOE's energy conservation standards address standby mode and off mode energy use only for non-weatherized oil-fired furnaces (“NWOFs”) (including mobile home furnaces) and electric furnaces (“EFs”). 10 CFR 430.32(e)(1)(iv). In this analysis, DOE considers such energy use in its determination of whether energy conservation standards need to be amended.

DOE is publishing this final determination pursuant to the six-year-lookback review requirement in EPCA.

B. Background

1. Current Standards

DOE most recently completed a review of the subject consumer furnace standards in a direct final rule (“DFR”) published in the
Federal Register
on June 27, 2011 (“June 2011 DFR”), through which DOE prescribed amended energy conservation standards for non-weatherized gas furnaces (“NWGFs”), mobile home gas furnaces (“MHGFs”), weatherized gas furnaces (“WGFs”), non-weatherized oil-fired furnaces (“NWOFs”), mobile home oil furnaces (“MHOFs”), and weatherized oil furnaces (“WOFs”).
4

76 FR 37408. The June 2011 DFR amended the existing energy conservation standards for NWGFs, MHGFs, and NWOFs (which are specified in terms of annual fuel utilization efficiency (“AFUE”)) and amended the compliance date (but left the existing standards in place) for WGFs. The June 2011 DFR also established electrical standby mode and off mode standards for NWGFs, MHGFs, NWOFs, MHOFs, and electric furnaces. As a result of a settlement agreement approved by the Court of Appeals for the District of Columbia (“D.C.”) Circuit, the standards established by the June 2011 DFR for NWGFs and MHGFs did not go into effect.
5

However, the court order left in place the standards for WGFs, NWOFs, MHOFs, WOFs, and EFs, which are the subject of this final determination. These standards are set forth in DOE's regulations at 10 CFR 430.32(e)(1)(ii) and (e)(1)(iv) and are shown in Table II.1 and Table II.2.

4
This rulemaking was undertaken pursuant to the voluntary remand in
State of New York, et al.
v.
Department of Energy, et al.,
08-311-ag(L); 08-312-ag(con) (2d Cir. filed Jan. 17, 2008).

5
DOE confirmed the standards and compliance dates promulgated in the June 2011 DFR in a notice of effective date and compliance dates published in the
Federal Register
on October 31, 2011 (“October 2011 notice”). 76 FR 67037. After publication of the October 2011 notice, the American Public Gas Association (“APGA”) sued DOE to invalidate the rule as it pertained to NWGFs and MHGFs. Petition for Review,
American Public Gas Association, et al.
v.
Department of Energy, et al.,
No. 11-1485 (D.C. Cir. filed Dec. 23, 2011). On April 24, 2014, the Court granted a motion that approved a settlement agreement that was reached between DOE, APGA, and the various intervenors in the case, in which DOE agreed to a remand of the NWGF and MHGF portions of the June 2011 DFR in order to conduct further notice-and-comment rulemaking. Accordingly, the Court's order vacated the June 2011 DFR in part (
i.e.,
those portions relating to NWGFs and MHGFs) and remanded to the agency for further rulemaking. DOE addressed NWGFs and MHGFs in a separate rulemaking proceeding (
see
Docket No. EERE-2014-BT-STD-0031). DOE published a final rule in the
Federal Register
on December 18, 2023 amending the energy conservation standards for NWGFs and MHGFs. 88 FR 87502.

Table II.1—Federal AFUE Energy Conservation Standards for Oil, Electric, and Weatherized Gas Furnaces

Product class

AFUE
(percent)

Compliance date

Non-weatherized oil-fired furnaces (not including mobile home furnaces)
83
May 1, 2013.

Mobile home oil-fired furnaces
75
September 1, 1990.

Weatherized gas furnaces
81
January 1, 2015.

Weatherized oil-fired furnaces
78
January 1, 1992.

Electric furnaces
78
January 1, 1992.

Table II.2—Federal Standby Mode and Off Mode Energy Conservation Standards for Oil and Electric Furnaces

Product class

Maximum standby
mode electrical
power
consumption,

P
W, SB

(watts)

Maximum off
mode electrical
power
consumption,

P
W, OFF

(watts)

Compliance date

Non-weatherized oil-fired furnaces (including mobile home furnaces)
11
11
May 1, 2013.

Electric furnaces
10
10
May 1, 2013.

2. Current Rulemaking History

Amendments to EPCA in the National Appliance Energy Conservation Act of 1987 (“NAECA”; Pub. L. 100-12) established EPCA's original energy conservation standards for furnaces, consisting of the minimum AFUE levels for mobile home furnaces and for all other furnaces except “small” gas furnaces. (42 U.S.C. 6295(f)(1)-(2)) The original standards established a minimum AFUE of 75 percent for mobile home furnaces and 78 percent for all other furnaces. Pursuant to authority conferred under 42 U.S.C. 6295(f)(1)(B), DOE subsequently adopted a mandatory minimum AFUE level for “small” furnaces through a final rule published in the
Federal Register
on November 17, 1989 (“the

November 1989 Final Rule”). 54 FR 47916. The standards established by NAECA and the November 1989 Final Rule for “small” gas furnaces are still in effect for MHOFs, WOFs, and EFs.

Pursuant to EPCA, DOE was required to conduct two rounds of rulemaking to consider amended energy conservation standards for all consumer furnaces, and an additional round of rulemaking for mobile home furnaces. (42 U.S.C. 6295(f)(4)(A), (B), and (C)) In satisfaction of the first round of amended standards rulemaking under 42 U.S.C. 6295(f)(4)(B), on November 19, 2007, DOE published in the
Federal Register
a final rule (“November 2007 Final Rule”) that revised the standards for most furnaces but left them in place for two product classes (
i.e.,
MHOFs and WOFs).
6

The standards amended in the November 2007 Final Rule were to apply to furnaces manufactured or imported on and after November 19, 2015. 72 FR 65136 (Nov. 19, 2007). The energy conservation standards in the November 2007 Final Rule consist of a minimum AFUE level for each of the six classes of furnaces.
Id.
at 72 FR 65169. Based on the market analysis for the November 2007 Final Rule and the standards established under that rule, the November 2007 Final Rule eliminated the distinction between furnaces based on their certified input capacity (
i.e.,
the standards applicable to “small” furnaces were established at the same level and as part of their appropriate class of furnace generally).
Id.

6
The November 2007 Final Rule adopted amended standards for “oil-fired furnaces” generally. However, on July 28, 2008, DOE published a technical amendment final rule in the
Federal Register
that clarified that the amended standards adopted in the November 2007 Final Rule for oil-fired furnaces did not apply to MHOFs and WOFs; rather, they were only applicable for NWOFs. 73 FR 43611, 43613 (July 28, 2008).

Following DOE's adoption of the November 2007 Final Rule, several parties jointly sued DOE in the United States Court of Appeals for the Second Circuit (“Second Circuit”) to invalidate the rule. Petition for Review,
State of New York, et al.
v.
Department of Energy, et al.,
Nos. 08-0311-ag(L); 08-0312-ag(con) (2d Cir. filed Jan. 17, 2008). The petitioners asserted that the standards for furnaces promulgated in the November 2007 Final Rule did not reflect the “maximum improvement in energy efficiency” that “is technologically feasible and economically justified” under 42 U.S.C. 6295(o)(2)(A). On April 16, 2009, DOE filed with the Court a motion for voluntary remand that the petitioners did not oppose. The motion did not state that the November 2007 Final Rule would be vacated, but it indicated that DOE would revisit its initial conclusions outlined in the November 2007 Final Rule in a subsequent rulemaking action. DOE also agreed that the final rule in that subsequent rulemaking action would address both regional standards for furnaces and the effects of alternate standards on natural gas prices. The Second Circuit granted DOE's motion on April 21, 2009. DOE notes that the Second Circuit's order did not vacate the energy conservation standards set forth in the November 2007 Final Rule, and during the remand, the standards went into effect as originally scheduled.

On June 27, 2011, DOE published a direct final rule (“DFR”) in the
Federal Register
(“June 2011 DFR”) revising the energy conservation standards for residential furnaces pursuant to the voluntary remand in
State of New York, et al.
v.
Department of Energy, et al.
76 FR 37408. In the June 2011 DFR, DOE considered the amendment of the same six product classes considered in the November 2007 Final Rule analysis plus electric furnaces. As discussed previously, the June 2011 DFR amended the existing AFUE energy conservation standards for NWGFs, MHGFs, and NWOFs and amended the compliance date (but left the existing standards in place) for WGFs. The June 2011 DFR also established electrical standby mode and off mode energy conservation standards for NWGFs, MHGFs, NWOFs, MHOFs, and EFs. DOE confirmed the standards and compliance dates promulgated in the June 2011 DFR in a notice of effective date and compliance dates published in the
Federal Register
on October 31, 2011 (“October 2011 Notice”). 76 FR 67037. The November 2007 Final Rule and the June 2011 DFR represented the first and the second rounds, respectively, of the two rulemakings required under 42 U.S.C. 6295(f)(4)(B)-(C) to consider amending the energy conservation standards for consumer furnaces.

The June 2011 DFR and October 2011 Notice amended, in relevant part, the AFUE energy conservation standards and compliance dates for three product classes of consumer furnaces (
i.e.,
NWGFs, MHGFs, and NWOFs).
7

The existing AFUE standards were left in place for three classes of consumer furnaces (
i.e.,
WOFs, MHOFs, and EFs). For WGFs, the existing standard was left in place, but the compliance date was amended. Electrical standby mode and off mode energy consumption standards were established for non-weatherized gas and oil-fired furnaces (including mobile home furnaces) and EFs. Compliance with the energy conservation standards promulgated in the June 2011 DFR was to be required on May 1, 2013 for NWGFs, MHGFs, and NWOFs, and on January 1, 2015, for weatherized furnaces. 76 FR 37408, 37547-37548 (June 27, 2011); 76 FR 67037, 67051 (Oct. 31, 2011). The amended energy conservation standards and compliance dates in the June 2011 DFR superseded those standards and compliance dates promulgated by the November 2007 Final Rule for NWGFs, MHGFs, and NWOFs. Similarly, the amended compliance date for WGFs in the June 2011 DFR superseded the compliance date in the November 2007 Final Rule.

7
For NWGFs and MHGFs, the standards were amended to a level of 80-percent AFUE nationally with a more-stringent 90-percent AFUE requirement in the Northern Region. For NWOFs, the standard was amended to 83-percent AFUE nationally. 76 FR 37408, 37410 (June 27, 2011).

Following DOE's adoption of the June 2011 DFR, APGA filed a petition for review with the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) to invalidate the DOE rule as it pertained to NWGFs and MHGFs. Petition for Review,
American Public Gas Association, et al.
v.
Department of Energy, et al.,
No. 11-1485 (D.C. Cir. filed Dec. 23, 2011). The parties to the litigation engaged in settlement negotiations, which ultimately led to filing of an unopposed motion on March 11, 2014, seeking to vacate DOE's rule in part and to remand to the agency for further rulemaking.

On April 24, 2014, the Court granted the motion and ordered that the standards established for NWGFs and MHGFs be vacated and remanded to DOE for further rulemaking. As a result, the standards established by the June 2011 DFR for NWGFs and MHGFs did not go into effect, and, thus, required compliance with the standards established in the November 2007 Final Rule for these products began on November 19, 2015. As stated previously, the AFUE standards for WOFs, MHOFs, and EFs were unchanged, and as such, the original standards for those product classes remain in effect. Further, the amended standard for NWOFs was not subject to the Court order and went into effect as specified in the June 2011 DFR. The AFUE standards currently applicable to all residential furnaces,
8

including the

five product classes for which DOE is analyzing amended standards leading to this final determination, are set forth in DOE's regulations at 10 CFR 430.32(e)(1)(ii).

8
DOE divides consumer furnaces into seven classes for the purpose of setting energy conservation standards: (1) NWGFs, (2) MHGFs, (3) WGFs, (4) NWOFs, (5) MHOFs, (6) WOFs, and (7) EFs. 10 CFR 430.32(e)(1)(ii). As noted previously, DOE analyzed amended standards for NWGFs and

MHGFs as part of a separate rulemaking (
see
Docket No. EERE-2014-BT-STD-0031). DOE published a final rule in the
Federal Register
on December 18, 2023 amending the energy conservation standards for NWGFs and MHGFs. 88 FR 87502.

On January 28, 2022, DOE published in the
Federal Register
a request for information (“January 2022 RFI”) to initiate a review to determine whether any new or amended standards would satisfy the relevant requirements of EPCA for a new or amended energy conservation standard for oil, electric, and weatherized gas consumer furnaces. 87 FR 4513. On November 29, 2022, DOE published in the
Federal Register
a notice of availability of a preliminary technical support document (“TSD”) (“the November 2022 Preliminary Analysis”) and the accompanying preliminary TSD (“the November 2022 Preliminary Analysis TSD”) that presented initial technical analyses in the following areas: (1) market and technology; (2) screening; (3) engineering; (4) markups to determine product price; (5) energy use; (6) LCC and PBP, and (7) national impacts. 87 FR 73259. DOE held a public meeting webinar on December 19, 2022, in order to receive public input and information related to the November 2022 Preliminary Analysis for the subject furnaces. On November 29, 2023, DOE published a NOPD (“the November 2023 NOPD”) in the
Federal Register
, which tentatively determined that current standards for oil, electric, and weatherized gas furnaces do not need to be amended.
9

88 FR 83426.

9
No stakeholders requested that a public meeting webinar be held in response to the November 2023 NOPD, and, therefore, DOE did not elect to host a webinar for this NOPD.

DOE received comments in response to the November 2023 NOPD from the interested parties listed in Table II.3.

Table II.3—List of Commenters With Written Submissions in Response to the November 2023 NOPD

Commenter(s)
Abbreviation

Comment No.
in the docket

Commenter type

Air-Conditioning, Heating, and Refrigeration Institute
AHRI
36
Trade Association.

American Gas Association, American Public Gas Association, National Propane Gas Association
Joint Commenters
33
Trade Association.

Andrew Chiafullo
Chiafullo
31
Individual.

Appliance Standards Awareness Project, American Council for an Energy-Efficient Economy, Natural Resources Defense Council, New York State Energy Research and Development Authority, Northwest Energy Efficiency Alliance
Joint Advocates
34
Efficiency Organization.

Daikin Comfort Technologies North America, Inc.
Daikin
35
Manufacturer.

Lennox International
Lennox
32
Manufacturer.

Michael Ravnitzky
Ravnitzky
30
Individual.

A parenthetical reference at the end of a comment quotation or paraphrase provides the location of the item in the public record.
10

10
The parenthetical reference provides a reference for information located in the docket. (Docket No. EERE-2021-BT-STD-0031, which is maintained at
www.regulations.gov
). The references are arranged as follows: (commenter name, comment docket ID number, page of that document).

III. General Discussion and Rationale

DOE developed this final determination after a review of the market for the subject oil, electric, and weatherized gas consumer furnaces. DOE also considered comments, data, and information from interested parties that represent a variety of interests. This final determination addresses issues raised by these commenters.

A. General Comments

This section summarizes general comments received from interested parties.

1. Comments Supporting Proposed Determination

Daikin supported DOE's conclusion in the November 2023 NOPD that the current standards for oil, electric, and weatherized gas consumer furnaces do not need to be amended based on the results of the analyses that assessed impacts on manufacturers and product availability. (Daikin, No. 35 at p. 1) AHRI supported DOE's determination not to amend energy conservation standards for oil and weatherized gas consumer furnaces due to the small markets for these products, the minimal energy savings potential at the efficiency levels analyzed, and the problems consumers would face from lack of product availability. In addition, AHRI agreed with DOE's conclusion that amended energy standards for electric furnaces are not technologically feasible. (AHRI, No. 36 at p. 1) Ravnitzky supported DOE's conclusion regarding energy conservation standards for oil, electric, and weatherized gas consumer furnaces due to DOE's analysis of the technological feasibility, economic justification, and potential for significant energy savings. (Ravnitzky, No. 30 at p. 1)

Lennox supported DOE's conclusion that no new standards are appropriate for oil and weatherized gas consumer furnaces. (Lennox, No. 32 at pp. 1-2) The commenter agreed with DOE's conclusion that oil-fired and weatherized gas furnaces are niche products with flat or declining sales; Lennox added that consumer cost and utility issues for weatherized gas products—including costs and physical challenges regarding condensate management that would be required if standards were tightened—provide additional support to DOE's conclusion that more-stringent standards for weatherized gas products are not justified. (
Id.
at p. 3) Lennox further agreed with DOE's conclusion that more-stringent energy conservation standards for electric furnaces are not technologically feasible for the niche electric furnace market. (
Id.
at p. 2) Lennox recommended that DOE continue to refrain from increasing furnace equipment costs by imposing new efficiency standards because they cannot be justified due to impacts resulting from the COVID-19 pandemic and the rise of inflation. (
Id.
at pp. 2, 4)

The Joint Commenters supported DOE's proposed determination that amended standards for weatherized gas consumer furnaces are not statutorily justified at this time because they are not economically justified and because they have relatively small or declining

markets. (Joint Commenters, No. 33 at p. 2)

2. Comments Opposing Proposed Determination

The Joint Advocates recommended that DOE reconsider its proposed determination that amended AFUE standards for oil and weatherized gas consumer furnaces are not needed despite their technological feasibility. The Joint Advocates commented that DOE did not complete a manufacturer impact analysis (“MIA”) for the November 2023 NOPD, despite claiming that amended standards would not be economically justified due to potential manufacturer challenges that may impact the market for those products. These commenters stated that, according to DOE's data, strengthening standards for these products would result in considerable cost savings for consumers, as outlined in the LCC and NIA results presented in the November 2023 NOPD. The Joint Advocates commented that amending the standards for NWOFs in particular could provide significant benefits for consumers. (Joint Advocates, No. 34 at pp. 1-2)

In response, as discussed in section II.A of this document, DOE is directed by EPCA to conduct periodic rulemakings to determine whether to amend the current energy conservation standards for various products, including consumer furnaces. (42 U.S.C. 6295(m)(1)) In determining whether a potential more-stringent standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the seven statutory factors, which include the economic impacts to both consumers and manufacturers. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) Section IV of this document outlines DOE's approach to analyzing various potential amended standard levels, including a discussion of market trends and qualitative market impacts in section IV.F of this document. Section V of this document provides a qualitative discussion of the potential impacts to manufacturers, as well as a detailed explanation of DOE's weighing of the benefits and burdens (including consumer cost savings as noted by the Joint Advocates) and the rationale for not amending the existing standards for oil, electric, and weatherized gas furnaces.

DOE assessed in the November 2023 NOPD the market size and manufacturer landscape for NWOFs and MHOFs and concluded that these products make up less than one percent of the U.S. residential furnace market. With this small market size and expected diminishing sales, cost recovery could be challenging for manufacturers. In the case of WGFs, manufacturers would need to redesign 99 percent of products on the market today to meet a standard set at EL 1 for those products, and all but one OEM would need to design new condensing products. Given the dynamics of both the oil and weatherized gas furnace market, amending standards may result in shifts in market competition impacting availability of products that cover the full range of capacities. With this understanding of the manufacturer and market landscape, DOE is unable to conclude that any of the efficiency levels analyzed for these categories of furnaces would meet the statutory criteria required to amend energy conservation standards.

3. Other Topics

Ravnitzky recommended that DOE consider establishing a series of incentives and challenges designed to encourage technological advancements in furnace designs that improve both the function and energy efficiency of consumer furnaces. (Ravnitzky, No. 30 at pp. 1-2) The commenter stated that incentivizing innovation offers a way to develop better and more affordable high-efficiency furnaces and suggested that prize contests have resulted in technological advancement while simultaneously fostering energy conservation and affordability. Ravnitzky commented that such a program could spur participants to surpass energy efficiency benchmarks (
e.g.,
AFUE ratings), innovate in the area of emissions reduction, develop materials that enhance heat transfer efficiency and durability, and lead to furnace designs that are both innovative and cost-effective. Ravnitzky argued that an added benefit to an approach incentivizing advancements would be the resulting likelihood of contributing to national energy independence and forming new business opportunities and job creation in the energy sector. (
Id.
) Ravnitzky further commented that incentives and challenges could foster collaboration and competition among manufacturers, universities, independent investors, and other stakeholders. Finally, the commenter recommended that the program be administered by DOE offices, including the Advanced Research Projects Agency—Energy, and structured to reward innovations in design, manufacturing processes, or materials that make high-efficiency furnaces more cost-effective and accessible to consumers. (
Id.
)

In response, DOE notes that its authority to regulate the energy efficiency of consumer products (including consumer furnaces) is outlined in EPCA, as discussed in section II.A of this document. Any incentive programs or prize contests are outside of the scope of that authority and this rulemaking. However, DOE further notes that there are voluntary energy efficiency appliance programs for consumer products, including furnaces, such as the ENERGY STAR® Program administered by the U.S. Environmental Protection Agency (“EPA”) or other DOE-funded initiatives such as the American-Made Challenges program.
11

11
For more information, see
www.energy.gov/eere/funding/eere-prizes-and-competitions.

The Joint Commenters encouraged DOE to implement the recommendations from the National Academy of Sciences' (“NAS's”) December 2021 report (“the NAS Report”) into its appliance rulemakings, including for WGFs. These commenters stated that the NAS Report identified several suggestions to improve DOE's rulemaking process, including ones related to economic modeling and providing data for public review to ensure transparency. (Joint Commenters, No. 33 at p. 2) The Joint Commenters recommended that DOE should ensure the public has sufficient notice and comment opportunity in the separate rulemaking proceeding mentioned in the November 2023 NOPD so as to confirm that the NAS Report's recommendations are appropriately implemented in all future appliance rulemakings, including this oil, electric, and weatherized gas furnace rulemaking. (
Id.
at p. 3)

The Joint Commenters reiterated the earlier comments of the American Gas Association,
et al.
in response to DOE's request for information regarding energy conservation standards for consumer boilers in May 2021, particularly regarding concerns about the following: (1) DOE's reliance on flawed projections of natural gas price trends and marginal residential natural gas prices, and (2) systemic problems with the agency's economic analysis of standards. The Joint Commenters stated that, like the recommendations in the NAS Report, these earlier comments highlight flaws in DOE's process that must be addressed to better model consumer purchasing decisions, future fuel prices, and more. (
Id.
)

In response, DOE notes that the rulemaking evaluating DOE's analytical methodologies and whether any modifications are warranted in relation to the NAS Report will be handled separately from individual product rulemakings, as stated in section VI.L of this document. As discussed in section V.C of this document, DOE is not amending the current energy conservation standards for the subject oil, electric, and weatherized gas consumer furnaces, and DOE has made this determination consistent with EPCA's requirements, including evaluation of economic justification of standards, and applicable executive orders.

B. Scope of Coverage and Product Classes

This final determination covers certain product classes of consumer furnaces (
i.e.,
ones for oil, electric, and weatherized gas furnaces) that meet the following definition of consumer “furnace” as codified at 10 CFR 430.2:

A “furnace” is defined as a product which utilizes only single-phase electric current, or single-phase electric current or DC current in conjunction with natural gas, propane, or home heating oil, and which—

(A) Is designed to be the principal heating source for the living space of a residence;

(B) Is not contained within the same cabinet with a central air conditioner whose rated cooling capacity is above 65,000 Btu per hour;

(C) Is an electric central furnace, electric boiler, forced-air central furnace, gravity central furnace, or low-pressure steam or hot water boiler; and

(D) Has a heat input rate of less than 300,000 Btu per hour for electric boilers and low-pressure steam or hot water boilers and less than 225,000 Btu per hour for forced-air central furnaces, gravity central furnaces, and electric central furnaces.

10 CFR 430.2. As noted previously, this final determination applies only to oil, electric, and weatherized gas consumer furnaces. The scope of coverage is discussed in further detail in section IV.A.1 of this document.

When evaluating and establishing/amending energy conservation standards, DOE divides covered products into product classes by the type of energy used or by capacity or other performance-related features that justify differing standards. In making a determination on whether a performance-related feature justifies a different standard, DOE must consider such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (42 U.S.C. 6295(q)) The product classes for this final determination are discussed in further detail in section IV.A.2 of this document.

C. Test Procedure

EPCA sets forth generally applicable criteria and procedures for DOE's adoption and amendment of test procedures. (42 U.S.C. 6293) Manufacturers of covered products must use these test procedures to quantify the efficiency of their product and as the basis for certifying to DOE that their product complies with the applicable energy conservation standards and as the basis for any representations regarding the energy use or energy efficiency of the product. (42 U.S.C. 6295(s) and 42 U.S.C. 6293(c)). Similarly, DOE must use these test procedures to evaluate whether a basic model complies with the applicable energy conservation standard(s) adopted pursuant to EPCA. (42 U.S.C. 6295(s); 10 CFR 429.110(e))

The test procedure for determining AFUE, P
W, SB
, and P
W, OFF
is established at 10 CFR part 430, subpart B, appendix N. AFUE is an annualized fuel efficiency metric that accounts for fossil fuel consumption in active, standby, and off modes. P
W, SB
and P
W, OFF
are measurements of the standby mode and off mode electrical power consumption, respectively, in watts. The test procedure for consumer furnaces was last amended by a final rule published in the
Federal Register
on January 15, 2016 (“January 2016 TP Final Rule”). 81 FR 2628.
12

12
On March 13, 2023, DOE published in the
Federal Register
a test procedure final rule for consumer boilers, which are a type of furnace under EPCA (
see
42 U.S.C. 6291(23)) but are not included within the scope of this rulemaking (
see
section IV.A.1 of this document). 88 FR 15510. This test procedure final rule separated the test method for consumer boilers from the test method for other types of furnaces and moved the boilers test method to a new appendix EE to 10 CFR part 430, subpart B. Accordingly, it amended appendix N so as to remove provisions applicable only to boilers, but it did not materially change the test method for the oil, electric, and weatherized gas furnaces that are the subject of this rulemaking.

The revisions to the consumer furnaces test procedure in the January 2016 TP Final Rule included:

• Clarification of the electrical power term “PE”;

• Adoption of a smoke stick test for determining use of minimum default draft factors;

• Allowance for the measurement of condensate under steady-state conditions;

• Reference to manufacturer's installation and operation manual and clarifications for when that manual does not specify test set-up;

• Specification of duct-work requirements for units that are installed without a return duct;

• Specification of testing requirements for units with multi-position configurations; and

• Revision of the requirements regarding AFUE reporting precision.

81 FR 2628, 2629-2630 (Jan. 15, 2016).

The changes in the January 2016 TP Final Rule were mandatory for representations of furnace efficiency made on or after July 13, 2016. As such, the most current version of the test procedure (published in January 2016) has now been in place for several years.

D. Standby Mode and Off Mode

As discussed in section II.A of this document, EPCA requires any final rule for new or amended energy conservation standards promulgated after July 1, 2010, to address standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3))

“Standby mode” and “off mode” energy use are defined in the DOE test procedure for residential furnaces (
i.e.,
“Uniform Test Method for Measuring the Energy Consumption of Consumer Furnaces Other Than Boilers,” 10 CFR part 430, subpart B, appendix N; “appendix N”). In that test procedure, DOE defines “standby mode” as any mode in which the furnace is connected to a main power source and offers one or more of the following space heating functions that may persist: (a) to facilitate the activation of other modes (including activation or deactivation of active mode) by remote switch (including thermostat or remote control), internal or external sensors, and/or timer; and (b) continuous functions, including information or status displays or sensor-based functions. 10 CFR part 430, subpart B, appendix N, section 2. “Off mode” for consumer furnaces is defined as a mode in which the furnace is connected to a main power source and is not providing any active mode or standby mode function, and where the mode may persist for an indefinite time. The existence of an off switch in off position (a disconnected circuit) is included within the classification of off mode. 10 CFR part 430, subpart B, appendix N, section 2. An “off switch” is defined as the switch on the furnace that, when activated, results in a measurable change in energy consumption between the standby and off modes. 10 CFR part 430, subpart B, appendix N, section 2. Currently, the standby mode and off mode energy conservation standards for NWOFs and EFs are outlined in 10 CFR 430.32(e)(1)(iv) and are shown in Table II.2 of this document. Compliance with

the Federal standards for standby mode and off mode electricity consumption for NWOFs, MHOFs, and EFs, as measured by standby power consumption in watts (“P
W, SB
”) and off mode power consumption in watts (“P
W, OFF
”), was required on May 1, 2013.

In the November 2022 Preliminary Analysis, DOE analyzed amended standby/off mode standards for NWOFs, MHOFs, and EFs. DOE did not consider amended standby mode and off mode standards for WGFs and WOFs, because DOE has previously concluded in a DFR published in the
Federal Register
on June 27, 2011 that these products are packaged with either an air conditioner or a heat pump and that the standards for those products, specified in terms of power consumption in watts and seasonal energy efficiency ratio (“SEER”), already account for the standby mode and off mode energy consumption for these classes of furnaces. 76 FR 37408, 37433. Based on market analysis conducted for the November 2022 Preliminary Analysis and updated for this final determination, DOE concludes that WGFs and WOFs continue to be packaged with an air conditioner or heat pump.

In the analysis for the November 2022 Preliminary Analysis, DOE established the baseline for NWOFs, MHOFs, and EFs as the current Federal standby mode and off mode standards (
see
Table II.2). DOE also defined and identified baseline components as those that consumed the most electricity during standby mode and off mode operation. For intermediate efficiency levels, DOE utilized a design-option approach to identify design options that could be applied to the baseline design to reduce standby mode and off mode energy consumption. Above the baseline efficiency level, DOE implemented design options in the order of incremental energy savings relative to baseline until all available design options were employed (
i.e.,
at a max-tech level). DOE identified two design options between the baseline and max-tech designs that were used as the basis for intermediate standby mode and off mode design options. Specifically, DOE replaced the linear transformer found in models at the baseline with a low-loss transformer (“LL-LTX”) for the first intermediate efficiency level and replaced the linear power supply found in baseline models with a switching mode power supply (“SMPS”) for the second intermediate efficiency level.

The max-tech standby mode and off mode efficiency level in the November 2022 Preliminary Analysis was based on a combination of the two design options that were analyzed for the intermediate efficiency levels. To reach max-tech, DOE analyzed using an LL-LTX in combination with an SMPS to reach the minimum standby mode or off mode power consumption (without eliminating other consumer- or performance-related electronic features). For this design option, a transformer is only needed to step down the voltage for the thermostat because the SMPS is able to step down the voltage for the other components of the furnace. As such, a smaller, lower-cost LL-LTX is used at the max-tech level, as compared to the LL-LTX used at EL 1 (
i.e.,
the first intermediate efficiency level). Since the November 2022 Preliminary Analysis, DOE has not identified any additional design options that could reduce standby mode and off mode energy consumption.

In the November 2023 NOPD, DOE found that there was some degree of uncertainty with respect to the appropriateness of the standby mode/off mode efficiency levels analyzed in the November 2022 Preliminary Analysis—particularly for products that are in development but also possibly in some products already on the market. There was also uncertainty related to the potential impacts that standby mode and off mode power consumption standards could have on overall system energy consumption, taking into account the power needs for features such as safety sensors or other improvements to functionality that would benefit the consumer. Consequently, DOE determined that it lacked the necessary information and requisite evidence to amend the standby mode and off mode standards and did not propose to amend the standby mode/off mode power standards for NWOFs, MHOFs, and EFs. 88 FR 83426, 83433-83434 (Nov. 29, 2023). This assessment has not materially changed since the time of the November 2023 NOPD.

Lennox agreed with DOE's conclusion that no new standards for standby mode and off mode are appropriate. The commenter stated that increasing the stringency of standby power levels would inhibit innovations that benefit consumers, save more significant amounts of energy, and implement additional safety features. (Lennox, No. 32 at pp. 1-3) Lennox also agreed with DOE's conclusion that separate standby mode and off mode power standards are not appropriate for weatherized gas furnace products, as these products are packaged with air conditioners or heat pumps that account for standby mode and off mode energy use in the respective energy conservation standards for those products. (
Id.
at p. 3)

In this final determination, for reasons similar to those explained in the November 2023 NOPD, DOE concludes that amended standby mode/off mode standards for NWOFs, MHOFs, and EFs are not justified at this time.

E. Technological Feasibility

1. General Considerations

As discussed, a determination that amended energy conservation standards are not needed must be based on consideration of whether amended standards would result in significant conservation of energy, are technologically feasible, and are cost-effective. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2))

To determine whether potential amended standards would be technologically feasible, DOE first develops a list of all known technologies and design options that could improve the efficiency of the products that are the subject of the determination. DOE considers technologies incorporated in commercially-available products or in working prototypes to be “technologically feasible.” 10 CFR part 430, subpart C, appendix A, sections 6(b)(3)(i) and 7(b)(1). Section IV.A.3 of this document discusses the technology options identified and considered by DOE for this analysis for oil, electric, and weatherized gas furnaces.

After DOE has determined which, if any, technologies and design options are technologically feasible, it further evaluates each technology and design option in light of the following additional screening criteria: (1) practicability to manufacture, install, and service; (2) adverse impacts on product utility or availability; (3) adverse impacts on health or safety; and (4) unique-pathway proprietary technologies. 10 CFR part 430, subpart C, appendix A, sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5). Those technology options that are “screened out” based on these criteria are not considered further. Those technology and design options that are not screened out are considered as the basis for higher efficiency levels that DOE could consider for potential amended standards. Section IV.A.4 of this document discusses the results of this screening analysis conducted for this final determination.

2. Maximum Technologically Feasible Levels

EPCA requires that for any proposed rule that prescribes an amended or new energy conservation standard or prescribes no amendment or no new standard for a type (or class) of covered product, DOE must determine the maximum improvement in energy efficiency or maximum reduction in energy use that is technologically feasible for each type (or class) of covered products. (42 U.S.C. 6295(p)(1)) Accordingly, in the engineering analysis, DOE identifies the maximum technologically feasible efficiency level currently available on the market for oil, electric, and weatherized gas furnaces. DOE also defines such “max-tech” efficiency level, representing the maximum theoretical efficiency that can be achieved through the application of all available technology options retained from the screening analysis.
13

In many cases, the max-tech efficiency level is not commercially available because it is not currently economically feasible. The max-tech levels that DOE determined for this analysis are described in section IV.B.1.c of this final determination.

13
In applying these design options, DOE would only include those that are compatible with each other that when combined, would represent the theoretical maximum possible efficiency.

F. Energy Savings

1. Determination of Savings

For each efficiency level (“EL”) evaluated, DOE projects anticipated energy savings from application of the EL to the oil, electric, and weatherized gas furnace products purchased during the 30-year period that begins in the assumed year of compliance with potential amended standards (2030-2059).
14

The savings are measured over the entire lifetime of products purchased during the 30-year analysis period. DOE quantifies the energy savings attributable to each EL 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 such products would likely evolve in the absence of amended energy conservation standards.

14
DOE also presents a sensitivity analysis that considers impacts for products shipped in a nine-year period.

DOE uses its NIA spreadsheet models to estimate national energy savings from potential amended standards for the products analyzed. The NIA spreadsheet model (described in section IV.G of this document) calculates energy savings in terms of site energy, which is the energy directly consumed by the products at the locations where they are used. For electricity, DOE reports national energy savings in terms of primary energy savings, which is the savings in the energy that is used to generate and transmit the site electricity. For natural gas, the primary energy savings are considered to be equal to the site energy savings. DOE also calculates national energy savings (“NES”) in terms of full-fuel-cycle (“FFC”) energy savings. The FFC metric includes the energy consumed in extracting, processing, and transporting primary fuels (
i.e.,
coal, natural gas, petroleum fuels), and, thus, presents a more complete picture of the impacts of energy conservation standards.
15

DOE's approach is based on the calculation of an FFC multiplier for each of the energy types used by covered products. Section IV.G of this document provides more information on FFC energy savings.

15
The FFC metric is discussed in DOE's statement of policy and notice of policy amendment. 76 FR 51281 (August 18, 2011), as amended at 77 FR 49701 (August 17, 2012).

2. Significance of Savings

As discussed, a determination that amended standards are not needed must be based on consideration of whether amended standards will result in significant conservation of energy, among other factors. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2))

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.
16

For example, for some covered products, most of the energy consumption occurs during periods of peak energy demand. The impacts of these products on the energy infrastructure can be more pronounced than the impacts of products with relatively constant demand. Accordingly, DOE evaluates the significance of energy savings on a case-by-case basis. The significance of energy savings is further discussed in section V.B.1 of this final determination.

16
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 70892).

G. Cost-Effectiveness

As discussed, a determination that amended standards are not needed must be based on consideration of whether amended standards would be cost-effective, among other factors. (42 U.S.C. 6295(m)(1)(A) and 42 U.S.C. 6295(n)(2))

In evaluating cost-effectiveness, EPCA requires DOE to consider savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered product that are likely to result from the standard. (42 U.S.C. 6295(n)(2)(c) and 42 U.S.C. 6295(o)(2)(B)(i)(II)) Cost-effectiveness is also one of the factors that DOE considers under 42 U.S.C. 6295(o)(2)(B) in determining whether new or amended standards are economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(II))

In determining cost-effectiveness of potential amended standards for covered products, DOE generally conducts LCC and PBP analyses that estimate the costs and benefits to users from potential standards. Section IV.E of this document provides more information on the LCC and PBP analyses conducted for this final determination. To further inform DOE's consideration of the cost-effectiveness of potential amended standards, DOE considered the NPV of total costs and benefits estimated as part of the NIA. The inputs for determining the NPV of the total costs and benefits experienced by consumers are: (1) total annual installed cost, (2) total annual operating costs (energy costs and repair and maintenance costs), and (3) a discount factor to calculate the present value of costs and savings. The results of this analysis are discussed in section V.C.2 of this document.

H. Further Considerations

In determining whether a potential, more-stringent standard is economically justified, DOE must determine whether the benefits of the standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)). DOE must make this determination after receiving comments on the proposed standard, and by considering, to the greatest extent practicable, the following seven statutory factors:

(1) The economic impact of the standard on manufacturers and consumers of the product subject to the standard;

(2) The savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price, initial charges for, or maintenance expenses of the covered product that are likely to result from the standard;

(3) The total projected amount of energy (or as applicable, water) savings likely to result 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 and water conservation; and

(7) Other factors the Secretary considers relevant.

(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))

The following sections discuss how DOE has addressed each of these seven factors in this final determination.

1. Economic Impact on Manufacturers and Consumers

In determining the impacts of a potential new or amended standard on manufacturers, DOE conducts an MIA. DOE first uses an annual cash-flow approach to determine the quantitative impacts. This step includes both a short-term assessment—based on the cost and capital requirements during the period between when a regulation is issued and when entities must comply with the regulation—and a long-term assessment over a 30-year period. The industry-wide impacts analyzed include: (1) industry net present value, 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. Since DOE has determined not to amend standards for oil, electric, and weatherized gas furnaces, this final determination will have no cash-flow impacts on manufacturers. Accordingly, DOE did not conduct an MIA for this final determination.

For individual consumers, measures of economic impact include the changes in LCC and PBP associated with new or amended standards. These measures are discussed further in the following section. For consumers in the aggregate, DOE also calculates the national NPV of the consumer costs and benefits expected to result from particular standards. DOE also evaluates the impacts of potential standards on identifiable subgroups of consumers that may be affected disproportionately by a standard. Since DOE has determined not to amend standards for oil, electric, and weatherized gas furnaces, this final determination will have no disproportionate impact on identifiable subgroups of consumers. Accordingly, DOE did not conduct a subgroup analysis for this final determination.

2. Savings in Operating Costs Compared To Increase in Price

EPCA requires DOE to consider the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered product that are likely to result from a standard. (42 U.S.C. 6295(m)(1); 42 U.S.C. 6295(n)(2), and 42 U.S.C. 6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP analyses.

For its LCC and PBP analyses, DOE assumes that consumers will purchase the covered product in the first year of compliance with new or amended standards. The LCC savings for the considered efficiency levels are calculated relative to the case that reflects projected market trends in the absence of new or amended standards. DOE's LCC and PBP analyses are discussed in further detail in section IV.E of this document.

3. Energy Savings

EPCA requires DOE, in determining the economic justification of an amended standard, to consider the total projected energy savings that are expected to result directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III))

As discussed in section IV.G of this document, DOE uses the NIA spreadsheet models to project national energy savings that are expected to result directly from an amended standard.

4. Lessening of Utility or Performance of Products

In establishing product classes and in evaluating design options and the impact of potential standard levels, DOE evaluates potential standards that would not lessen the utility or performance of the considered product. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Since DOE has determined not to amend standards for oil, electric, and weatherized gas furnaces, this final determination will not impact the utility of such products.

5. Impact of Any Lessening of Competition

EPCA directs DOE to consider the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) Since DOE has determined not to amend standards for oil, electric, and weatherized gas furnaces, DOE did not transmit a copy of its determination to the Attorney General for anti-competitive review.

6. 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. 6295(o)(2)(B)(i)(VI)) The energy savings from the standards are likely to provide improvements to the security and reliability of the Nation's energy system. Reductions in the demand for electricity also may result in reduced costs for maintaining the reliability of the Nation's electricity system. DOE generally conducts a utility impact analysis to estimate how standards may affect the Nation's needed power generation capacity. However, since DOE has determined not to amend standards for oil, electric, and weatherized gas furnaces, DOE did not conduct this analysis.

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. Amended standards are likely to result in environmental benefits in the form of reduced emissions of air pollutants and greenhouse gases associated with energy production and use. DOE generally conducts an emissions analysis to estimate how amended standards may affect these emissions. DOE also generally estimates the economic value of emissions reductions resulting from an amended standard. However, since DOE has determined not to amend standards for oil, electric, and weatherized gas furnaces, DOE did not conduct this analysis.

7. Other Factors

In determining whether an energy conservation standard is economically justified, DOE may consider any other factors that the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To the extent DOE identifies any relevant information regarding economic justification that does not fit into the other categories described previously, DOE could consider such information under “other factors.”

IV. Methodology and Discussion of Related Comments

The following sections of this document address each key component of the analyses DOE has performed for this final determination with respect to oil, electric, and weatherized gas furnaces. Comments received from interested parties are addressed in each relevant section.

A. Market and Technology Assessment

DOE develops information in the market and technology assessment that provides an overall picture of the market for the products concerned, including the purpose of the products, the industry structure, manufacturers, market characteristics, and technologies used in the products. This activity includes both quantitative and

qualitative assessments, based primarily on publicly-available information. The subjects addressed in the market and technology assessment for this final determination include: (1) a determination of the scope and identification of product classes, (2) manufacturers and industry structure, (3) existing efficiency programs, (4) shipments information, (5) market and industry trends, and (6) technologies or design options for improving efficiency. The key findings of DOE's market assessment are summarized in the following sections.

1. Scope of Coverage

As mentioned in section III.B of this document, in assessing the scope of this rulemaking, DOE relied on the definition of “furnace” in 10 CFR 430.2. Any product meeting the definition of a “furnace” that is also an oil, electric, and weatherized gas furnace was included in the scope of DOE's analysis for this final determination. Non-weatherized gas furnaces and mobile home gas furnaces were considered in a separate rulemaking.
17

17

See
Docket No. EERE-2014-BT-STD-0031, which can be accessed at
www.regulations.gov.

a. Electric Furnaces

A basic EF is composed of an electric resistance heating element and blower assembly. (Additionally, there are products that include electrically powered heat pumps, but these are separately covered products not addressed here.) The electric resistance heating elements of EFs are highly efficient, and the efficiency of these units already approaches 100 percent. DOE is unaware of any technology options that can improve the efficiency of electric furnaces, so DOE has determined that more-stringent standards for EFs would not be technologically feasible. Therefore, DOE concludes that the energy savings potential from amended standards for EFs would be minimal. Consequently, DOE did not consider amended AFUE standards for EFs in this rulemaking.

b. Weatherized Oil-Fired Furnaces

DOE is not aware of any WOFs on the market, and, therefore, DOE did not analyze amended standards for that product class. DOE has concluded that because there are no WOFs on the market, there would be no potential energy savings from amended standards.

2. Product Classes

When evaluating and establishing or amending energy conservation standards, DOE may establish separate standards for a group of covered products (
i.e.,
establish a separate product class) if DOE determines that separate standards are justified based on the type of energy used, or if DOE determines that the product's capacity or other performance-related feature justifies a different standard. (42 U.S.C. 6295(q)) In making a determination whether a performance-related feature justifies a different standard, DOE considers such factors as the utility of the feature to the consumer and other factors DOE determines are appropriate. (
Id.
)

In this case, DOE divides furnaces into seven product classes based on fuel type (gas, oil, or electric), whether the furnace is weatherized or not, and whether the furnace is designed for use only in mobile homes or not. The current product classes for furnaces are (1) NWGFs, (2) MHGFs, (3) NWOFs, (4) MHOFs, (5) WGFs, (6) WOFs, and (7) EFs. 10 CFR 430.32(e)(1)(ii). As noted previously, NWGFs and MHGFs are being addressed in a separate rulemaking process.
18

Therefore, the product classes that DOE considered for this final determination are NWOFs, MHOFs, WGFs, WOFs, and EFs. However, for the reasons discussed in sections IV.A.1.a and IV.A.1.b of this document, amended energy conservation standards were not analyzed for EFs or WOFs.

18

See
Docket No. EERE-2014-BT-STD-0031.

In summary, DOE assessed amended energy conservation standards in terms of AFUE for the NWOF, MHOF, and WGF product classes in this final determination. Again, for the reasons discussed in section III.D of this document, DOE did not analyze new or amended standby mode/off mode power standards for any product classes this time.

This final determination maintains the product classes currently established for oil, electric, and weatherized gas furnaces.

3. Technology Options

DOE develops information in the technology assessment that characterizes the technologies and design options that manufacturers may use to attain higher-efficiency performance.

In the November 2023 NOPD, DOE identified several technology options that would be expected to improve the efficiency of oil and weatherized gas furnaces in terms of AFUE, as measured by the DOE test procedure. To develop a list of technology options, DOE examined the efficiency-improving technologies used in consumer furnaces today. These technology options provide insight into the technological improvements typically used to increase the energy efficiency of consumer furnaces.

For this final determination, DOE has reviewed the consumer furnaces market and confirmed that the technology options identified in the November 2023 NOPD continue to reflect the market. The identified technology options are shown in Table IV.1.

Table IV.1—List of Technology Options Considered for This Final Determination

Technology option
Description

Condensing Secondary Heat Exchanger
The secondary heat exchanger allows more heat to be extracted from the flue gases before the products of combustion exit through the flue to the vent system by condensing any water vapor and releasing the resulting latent heat.

Heat Exchanger Improvements
Improvements to the heat exchanger can be achieved by modifying baseline designs of standard furnaces to incorporate any combination of: (1) increased heat exchanger surface area, (2) heat exchanger surface features, and/or (3) heat exchanger baffles and turbulators. Improving the heat exchanger for fossil fuel-fired furnaces can increase the rate of heat transfer from the hot combustion gases to the circulation air that is distributed to the heated space. This improved heat transfer increases thermal efficiency and AFUE.

Two-Stage and Modulating Combustion
Two-stage and modulating combustion allow furnaces to meet heating load requirements more precisely. When low heating load conditions exist, a two-stage or modulating furnace can operate at a reduced input rate for an extended period of burner on-time to meet the reduced heating load. This improves comfort by reducing large fluctuations in room temperature. Because burner on-time increases, however, fuel use does not drastically decrease, so efficiency gains are typically small.

Pulse Combustion
Pulse combustion burners operate on self-sustaining resonating pressure waves that alternately rarefy the combustion chamber (drawing a fresh fuel-air mixture into the chamber) and pressurize it (causing ignition by compression heating of the mixture to its flash point). Pulse combustion systems feature high heat transfer rates, can self-vent, and can operate as isolated combustion systems. Because the pulse combustion process is highly efficient, the burners are generally used with condensing appliances.

Premix Burners

Premix burners completely premix the primary air and fuel prior to combustion, thereby eliminating the need for secondary air. These burners allow for more precise control over the air-fuel ratio, so that the level of excess air can be set for optimal performance. Premix burners are often utilized to control production of emissions, in particular NO
X
. The premix burners used in consumer furnaces on the market today are capable of achieving “ultra-low NO
X
” levels.

Burner Derating

Burner derating (
i.e.,
reducing burner firing rate while keeping heat exchanger geometry and surface area the same) will increase the ratio of heat transfer surface area to energy input, thereby increasing the AFUE.

Insulation Improvements
If the jacket loss test is performed, insulation improvements would reduce jacket losses and increase AFUE. Insulation can be improved by modifying the baseline furnace design through the use of increased jacket insulation or advanced forms of insulation.

Off-Cycle Dampers
Off-cycle (which refers to the burner off-cycle) dampers restrict the intake and exhaust airflow through the venting system during standby mode by closing when the burner is not operating, thereby trapping residual heat in the heat exchanger. During the burner off-cycle, a furnace can lose heat by natural convection and conduction through the combustion air inlet and flue. Installing a damper at these points can prevent heat from escaping and minimize off-cycle heat losses. Dampers have no effect on the steady-state performance of the furnace; however, they can reduce standby losses. The AFUE metric captures both steady-state and standby performance of the furnace, and thus any heated air that is retained in the system during the standby mode improves the furnace's AFUE.

Off-cycle dampers include: (1) electro-mechanical flue dampers, which are installed downstream of the heat exchanger, are activated by an external source of electricity, and open and close immediately when combustion starts and stops, (2) electro-mechanical burner inlet dampers, which are installed at the combustion-air inlet to the burner box and are designed to automatically close off the air passage and restrict the airflow through the heat exchanger when the burner is off.

Direct Venting
A direct venting system consists of a pipe that provides the burner with a direct connection to a combustion air source on the exterior of the building. This external connection allows the furnace to utilize outdoor air for combustion, which could result in an improvement in AFUE.

Concentric Venting
Concentric venting is accomplished by running the inlet and exhaust vents concentrically. The flue gases are exhausted through a central vent pipe, and the intake combustion air passes through a concentric duct surrounding it. This arrangement creates a counter-flow heat exchanger that recovers some heat from the flue gases to preheat the combustion air. It provides an efficiency advantage compared to non-concentric venting systems, as the concentric vent essentially serves as a shell-in-tube heat exchanger to recover heat.

Low-Pressure, Air-Atomized Oil Burner
To overcome the low input limitations of conventional oil burners, Brookhaven National Laboratory developed a low-pressure, air-atomized oil burner that can operate at firing rates as low as 0.25 gallons of oil per hour (10 kW). In addition, it can operate with low levels of excess combustion air (less than 10 percent) for lean-burning, ultra-clean combustion. A lower level of excess air generally improves AFUE rating. This single-stage burner design is also capable of firing fuel at high and low input rates, which are manually actuated by a switch, allowing it to closely match the smaller heating loads of well-insulated modern homes. The ability to derate the flame also greatly enhances the effectiveness of the heat exchanger, which improves steady-state efficiency.

High-Static Oil Burner
A modification of the conventional flame retention head burner is the high-static pressure flame retention head oil burner. These burners employ an air guide to direct air onto the optimal point on the blower wheel and a scroll insert to create high static pressure in the combustion chamber while maintaining consistent airflow. This higher pressure enables the furnace to overcome restrictive flow passages in compact, more efficient heat exchangers. These types of burners are also able to operate at lower levels of excess air, giving them a nearly five-percent AFUE advantage over flame retention head burners.

Delayed-Action Oil Pump Solenoid Valve
A delayed-action oil pump solenoid valve is installed between the oil pump and the burner nozzle to supplement the fuel pump regulator by delaying the fuel release by 3 to 6 seconds after the igniter and burner blower start until the oil pressure reaches the level required to fully discharge the oil into the combustion chamber without dripping. This ensures that the oil burns more completely. Testing at Brookhaven National Laboratory indicates that the typical efficiency benefit of delayed-action solenoid valves is expected to be less than one-percent AFUE.

As detailed in section IV.A.5 of this document, for each technology option identified, DOE applies screening criteria before considering it further in the analysis.

4. Screening Analysis

As discussed, DOE conducts a screening analysis to evaluate whether to further consider each identified technology and design option. DOE uses the following five screening criteria to determine which technology options are suitable for further consideration in an energy conservation standards rulemaking:

(1)
Technological feasibility
. Technologies that are not incorporated in commercially-available products or in commercially-viable, existing prototypes will not be considered further.

(2)
Practicability to manufacture, install, and service
. If it is determined that mass production of a technology in commercially-available products and reliable installation and servicing of the technology could not be achieved on the scale necessary to serve the relevant market at the time of the projected compliance date of the standard, then that technology will not be considered further.

(3)
Impacts on product utility
. If a technology is determined to have a significant adverse impact on the utility of the product to subgroups of consumers, or result in the unavailability of any covered product type with performance characteristics (including reliability), features, sizes, capacities, and volumes that are substantially the same as products generally available in the United States at the time, it will not be considered further.

(4)
Safety of technologies
. If it is determined that a technology would have significant adverse impacts on health or safety, it will not be considered further.

(5)
Unique-pathway proprietary technologies
. If a technology has proprietary protection and represents a unique pathway to achieving a given efficiency level, it will not be considered further, due to the potential for monopolistic concerns.

See
10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).

If DOE determines that a technology fails to meet one or more of these listed criteria, it is excluded from further consideration in the engineering analysis. The following sections include DOE's evaluation of each technology option against the screening analysis criteria.

a. Screened-Out Technologies

Based on DOE's research, DOE screened out the technology options on the basis of each screening criteria shown in Table IV.2 from further consideration as options to improve the AFUE (as measured by the DOE test procedure) of NWOFs, MHOFs, and WGFs. The reasons for exclusion associated with each technology are marked in the table with an
X.
Additional details about the reasons for exclusion are discussed in this section.

Table IV.2—Technology Options Screened Out

Excluded technology option
Applicable product class(es)

Screening criteria
(X = basis for screening out)

Technological feasibility

Practicability to install,
manufacture, and service

Impacts on product utility or product availability

Adverse
impacts on health or
safety

Unique-
pathway
proprietary technologies

Pulse combustion
WGF

X

Burner derating
WGF, NWOF, MHOF

X

Low-pressure, air-atomized oil burner
NWOF, MHOF
X

Pulse Combustion

In contrast to natural draft and induced draft furnaces, pulse combustion furnaces generate positive pressure in the heat exchanger. Although these products are generally safe, this could create a potential safety problem if the heat exchanger breaches, because combustion products can contaminate the circulation airstream.

Pulse combustion gas furnaces were available in the United States for more than two decades. However, they were withdrawn from the market within the past 20 years because manufacturers found that competing technologies, such as condensing secondary heat exchangers, cost significantly less to manufacture and operate. In light of the ability of furnace manufacturers to cost-effectively achieve high efficiencies without the use of pulse combustion, the technology's risks do not outweigh its benefits for consumer furnace applications. Accordingly, DOE did not

further analyze this technology option as part of this final determination.

Burner Derating

Because heat output rate is directly related to burner size, burner derating reduces the amount of heated air available to the consumer. This reduction in heat output rate adversely affects the utility to consumers. Therefore, DOE did not consider this technology option.

Low-Pressure, Air-Atomized Oil Burner

While tests performed at the Brookhaven National Laboratory seem to have successfully demonstrated enhanced AFUE performance under the DOE test procedure in oil boilers that employed prototype low-pressure air-atomized burners, the prototype burner was never tested on a furnace. Therefore, the technological feasibility of the burner prototype for incorporation into a residential oil-fired furnace remains unknown, so DOE did not consider low-pressure, air-atomized oil burners to be a viable technology for efficiency improvement for this final determination.

b. Remaining Technologies

After a thorough review of each technology, DOE concludes that all of the remaining identified technologies not “screened out” meet all of the screening criteria. In summary, DOE retained (
i.e.,
did not screen out) the technology options listed below:

• Condensing secondary heat exchanger

• Heat exchanger improvements

• Two-stage and modulating combustion

• Premix burners

• Insulation improvements

• Off-cycle dampers

• Direct venting

• Concentric venting

• High-static oil burner

• Delayed-action oil pump solenoid valve

DOE determined that these technology options are technologically feasible because they are being used or have previously been used in commercially-available products or working prototypes. DOE also finds that all of the remaining technology options meet the other screening criteria (
i.e.,
practicable to manufacture/install/service; do not result in adverse impacts on product utility, product availability, health, or safety; and do not utilize unique-pathway proprietary technologies). DOE considers these remaining technology options as the basis for higher efficiency levels that DOE could consider for potential amended standards.

5. Impact From Other Rulemakings

Lennox commented that manufacturers are facing unprecedented regulatory change elsewhere and significant cumulative regulatory burdens, which further supports DOE's determination not to increase the AFUE efficiency standards and not to increase standby and off mode standards for oil, electric, and weatherized gas consumer furnaces. (Lennox, No. 32 at pp. 3-4) Lennox stated that the related rulemakings include the EPA phasedown to lower-global warming potential (“GWP”) refrigerants, the energy conservation standards final rule for NWGFs/MHGFs, the National and Regional Cold Climate Heat Pump Specifications, the DOE energy conservation standards for air-cooled, three-phase air conditioners and heat pumps below 65,000 Btu/h and air-cooled, three-phase, variable refrigerant flow (“VRF”) air conditioners and heat pumps below 65,000 Btu/h, the DOE test procedure for VRF systems, and the EPA ENERGY STAR 4.0 for Light Commercial Heating, Ventilation, and Air Conditioning (“HVAC”). (
Id.
at p. 4) AHRI commented that most of the consumer furnace market (
i.e.,
NWGFs) is obligated to increase efficiency to 95-percent AFUE by December 2028, which is one step below max-tech and which is expected to place a significant economic burden on the industry. (AHRI, No. 36 at p. 2)

In response, DOE notes that the Department is not amending the energy conservation standards for oil, electric, and weatherized gas consumer furnaces, and, therefore, it does not expect this rulemaking to contribute to the cumulative regulatory burden on manufacturers.

B. Engineering and Cost Analysis

The purpose of the engineering analysis is to establish the relationship between the efficiency and manufacturer production cost (“MPC”) of the subject products (
i.e.,
NWOFs, MHOFs, and WGFs). There are two elements to consider in the engineering analysis: (1) the selection of efficiency levels to analyze (
i.e.,
the “efficiency analysis”), and (2) the determination of product cost at each efficiency level (
i.e.,
the “cost analysis”). In determining the performance of higher-efficiency products, DOE considers those technologies and design option combinations not eliminated by the screening analysis. For each product class, DOE estimates the baseline cost, as well as the incremental cost for the product at efficiency levels above the baseline. The output of the engineering analysis is a set of cost-efficiency “curves” that are used in downstream analyses (
i.e.,
the LCC and PBP analyses and the NIA).

DOE recently conducted an engineering analysis to determine the cost-efficiency relationship for oil and weatherized gas consumer furnaced for the November 2023 NOPD. 88 FR 83426, 83439-83446 (Nov. 29, 2023). For this final determination, DOE analyzed cost trends across the consumer oil and weatherized gas furnace market as part of the market and technology assessment (see section IV.A of this document) and found that oil and weatherized gas consumer furnace efficiencies have not changed substantially since the NOPD analysis. Thus, as discussed in section IV.B.1 of this document, DOE maintained the efficiency levels from the November 2023 NOPD in the final determination analysis. Additionally, DOE examined its most recent inputs to its manufacturing cost analysis (
e.g.,
raw material prices, component prices, labor rates) and found that, although MPC values for each efficiency level may have increased, the incremental MPCs would not significantly change from those in the November 2023 NOPD. Therefore, DOE concludes that an updated cost analysis would not impact the results of this final determination, so the Department is using the same methodology and analytical results as those described in the November 2023 NOPD engineering and cost analysis. Further information on this analytical methodology used in the November 2023 NOPD is presented in the following subsections.

1. Efficiency Analysis

DOE typically uses one of two approaches to develop energy efficiency levels for the engineering analysis: (1) relying on observed efficiency levels in the market (
i.e.,
the efficiency-level approach), or (2) determining the incremental efficiency improvements associated with incorporating specific design options to a baseline model (
i.e.,
the design-option approach). Using the efficiency-level approach, the efficiency levels established for the analysis are determined based on the market distribution of existing products (in other words, based on the range of efficiencies and efficiency level “clusters” that already exist on the market). Using the design-option approach, the efficiency levels established for the analysis are determined through detailed engineering calculations and/or computer simulations of the efficiency improvements from implementing

specific design options that have been identified in the technology assessment. DOE may also rely on a combination of these two approaches. For example, the efficiency-level approach (based on actual products on the market) may be extended using the design-option approach to interpolate to define “gap fill” levels (to bridge large gaps between other identified efficiency levels) and/or to extrapolate to the “max-tech” level (particularly in cases where the “max-tech” level exceeds the maximum efficiency level currently available on the market). For this final determination analysis, DOE used the efficiency-level approach.

a. Baseline Efficiency

For each product class, DOE generally selects a baseline model as a reference point for each class, and measures anticipated changes to the product resulting from potential energy conservation standards against the baseline model. The baseline model in each product class represents the characteristics of products typical of that class (
e.g.,
capacity, physical size). Generally, a baseline model is one that just meets current energy conservation standards, or, if no standards are in place, the baseline is typically the most common or least-efficient unit on the market.

A basic consumer gas furnace comprises a hot surface or direct spark ignition system, tubular in-shot burners, a noncondensing heat exchanger, a blower assembly (including motor and forward-swept fan blade), a mechanical draft combustion fan assembly, and automatic controls. A basic consumer oil-fired furnace comprises an interrupted spark ignition system, power burner, noncondensing heat exchanger, and blower assembly. Details and descriptions of each of these components can be found in chapter 3 of the November 2022 Preliminary Analysis TSD.

The identification of baseline units requires establishing the baseline efficiency level. In cases where there is an existing standard, DOE typically defines “baseline units” as units with efficiencies equal to the current Federal energy conservation standards. However, for the MHOF product class, DOE did not identify any currently available units at the minimum standard level (75-percent AFUE), and, therefore, DOE analyzed 80-percent AFUE as the baseline level for MHOFs, as it was the lowest efficiency available on the market.

In the November 2023 NOPD, DOE used the baseline levels presented in Table IV.3 as the baseline efficiency AFUE levels for oil, electric, and weatherized gas furnaces, along with the typical characteristics of a baseline unit.

Table IV.3—Baseline Efficiency Levels

Product class

Baseline AFUE level
(%)

Typical characteristics

NWOF
83
—Single-stage burner.

—Electronic ignition.

—Aluminized-steel heat exchanger.

—Indoor blower fan including PSC motor * and forward-curved blower impeller blade.

MHOF
80
—Single-stage burner.

—Electronic ignition.

—Aluminized-steel heat exchanger.

—Indoor blower fan including PSC motor * and forward-curved blower impeller blade.

—Direct venting system.

—Built-in evaporator coil cabinet.

WGF
81
—Draft inducer.

—Single-stage burner.

—Electronic ignition.

—Aluminized-steel tubular heat exchanger.

—Indoor blower fan including BPM * motor and forward-curved blower impeller blade.

* Consumer furnace fans incorporated into NWOFs, MHOFs, and WGFs manufactured on and after July 3, 2019 must meet fan energy rating (“FER”) standards specified in 10 CFR 430.32(y). The blower fan motor (among other factors) can affect FER. Brushless permanent magnet (“BPM”) motors have become the predominant motor type at the baseline AFUE levels for WGFs, and permanent split capacitor (“PSC”) motors, which are less efficient than BPM motors, are common for NWOFs and MHOFs.

Typically, baseline units are representative of the minimum technology and lowest-cost product that manufacturers can produce. Accordingly, in the teardown analysis, DOE examined a variety of baseline units that incorporate the various baseline design options for furnace components.

As stated previously, for this final determination, DOE used the baseline efficiency levels as presented in the November 2023 NOPD.

b. Intermediate Efficiency Levels

In the November 2023 NOPD, DOE also analyzed intermediate efficiency levels for NWOFs and MHOFs. 88 FR 83426, 83440-83441 (Nov. 29, 2023). However, for WGFs, DOE did not find any models on the market between the baseline (81-percent AFUE) and max-tech level (95-percent AFUE) and, therefore, did not analyze any intermediate efficiency levels for this product class. The intermediate efficiency levels analyzed for NWOFs were 85-percent and 87-percent AFUE, and the intermediate efficiency levels analyzed for MHOFs were 83-percent and 85-percent AFUE. To improve efficiency from the baseline to these intermediate efficiency levels, manufacturers generally increase the surface area of the heat exchanger, which increases the heat transfer area and, thus, allows manufacturers to achieve higher efficiencies. The intermediate efficiency levels analyzed were representative of common efficiency levels available on the market. DOE reviewed its own Compliance Certification Database (“CCD”), as well as AHRI's product

certification directories,
19

California Energy Commission's database,
20

manufacturer catalogs, and other publicly-available literature to inform its selection of intermediate efficiency levels.

19
AHRI's Directory of Certified Product Performance (Available at:
www.ahridirectory.org/Search/SearchHome
) (last accessed May 6, 2024).

20
California Energy Commission's MAEDbs (Available at:
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx
) (last accessed May 6, 2024).

As stated previously, for this final determination, DOE used the intermediate efficiency levels as presented in the November 2023 NOPD.

c. Maximum Technology (“Max-Tech”) Efficiency Levels

As noted, EPCA requires that any new or amended energy conservation standard be designed to achieve the maximum improvement in energy efficiency that is technologically feasible. (42 U.S.C. 6295(o)(2)(A)) As part of its analysis, DOE identifies the “maximum available” efficiency level, representing the highest efficiency unit currently available on the market. DOE also defines a “max-tech” efficiency level, representing the maximum theoretical efficiency that can be achieved through the application of all available technology options retained from the screening analysis. In many cases, the max-tech efficiency level is not commercially available because it is not currently economically feasible.

In the November 2023 NOPD, DOE conducted an analysis of the market and a technology assessment and researched current product offerings to determine the max-tech efficiency levels. 88 FR 83426, 83441 (Nov. 29, 2023). The max-tech level identified in each product class corresponded to the highest-AFUE furnace available on the market, which DOE found to correspond to the maximum technologically feasible levels at this time. For NWOFs, DOE identified a design that achieves a max-tech efficiency level of 96-percent AFUE. For MHOFs, the maximum efficiency level that DOE identified was 87-percent AFUE. For WGFs, DOE identified a max-tech efficiency level design that achieves 95-percent AFUE. For WGFs and NWOFs, the max-tech efficiency level is currently achieved by use of a condensing secondary heat exchanger. A constant-airflow BPM (“CA-BPM”) indoor blower motor was also implemented as the motor design option for the max-tech efficiency level for NWOFs, because the only NWOF model on the market available at this level includes a CA-BPM motor, and it was unclear if this level is achievable without using a CA-BPM fan motor. For MHOFs, the max-tech efficiency level is currently achieved by use of a heat exchanger with increased surface area.

As stated previously, for this final determination, DOE used the max-tech efficiency levels as presented in the November 2023 NOPD.

d. Summary of Efficiency Levels Analyzed

The AFUE efficiency levels analyzed along with the technologies that are expected to be used to increase energy efficiency above the baseline efficiency level for NWOFs, MHOFs, and WGFs are presented in Table IV.4, Table IV.5, and Table IV.6, respectively.

Table IV.4—AFUE Efficiency Levels and Technologies Used at Each Efficiency Level Above Baseline for NWOFs

Efficiency level

AFUE
(%)

Description of technologies typically incorporated

0—Baseline
83
See Table IV.3 for baseline features.

1
85
Baseline EL + Increased heat exchanger area.

2
87
EL 1 + Increased heat exchanger area.

3—Max-tech
96

EL 2 + Addition of condensing secondary heat exchanger (and associated components, sensors,
etc.
) + CA-BPM motor.

Table IV.5—AFUE Efficiency Levels and Technologies Used at Each Efficiency Level Above Baseline for MHOFs

Efficiency level

AFUE
(%)

Description of technologies typically incorporated

0—Baseline
80
See Table IV.3 for baseline features.

1
83
Baseline EL + Increased heat exchanger area.

2
85
EL 1 + Increased heat exchanger area.

3—Max-tech
87
EL 2 + Increased heat exchanger area.

Table IV.6—AFUE Efficiency Levels and Technologies Used at Each Efficiency Level Above Baseline for WGFs

Efficiency level

AFUE
(%)

Description of technologies typically incorporated

0—Baseline
81
See Table IV.3 for baseline features.

1—Max-tech
95

Baseline EL + Addition of condensing secondary heat exchanger (and associated components, sensors,
etc.
).

2. Cost Analysis

The cost analysis portion of the engineering analysis is conducted using one or a combination of cost approaches. The selection of cost approach depends on a suite of factors, including the availability and reliability of public information, characteristics of the regulated product, and the availability and timeliness of purchasing the product on the market.

The cost approaches generally used by DOE are summarized as follows:

☐
Physical teardowns:
Under this approach, DOE physically dismantles commercially-available products, component-by-component, to develop a detailed bill of materials for the products.

☐
Catalog teardowns:
In lieu of physically deconstructing products, DOE identifies each component using parts diagrams (available from manufacturer websites or appliance repair websites, for example) to develop the bill of materials for the product.

☐
Price surveys:
If neither a physical nor a catalog teardown is feasible (
e.g.,
for tightly integrated products such as fluorescent lamps, which are infeasible to disassemble and for which parts diagrams are unavailable), cost-prohibitive, or otherwise impractical (
e.g.,
large commercial boilers), DOE conducts price surveys using publicly-available pricing data published on major online retailer websites and/or by soliciting prices from distributors and other commercial channels.

In the November 2023 NOPD, DOE conducted the cost analysis using a combination of physical and catalog teardowns. 88 FR 83426, 83443 (Nov. 29, 2023). DOE estimated the MPC associated with each efficiency level to characterize the cost-efficiency relationship of improving consumer furnace performance, in terms of AFUE.

The units selected for the teardown analysis for the November 2023 NOPD and used in this final determination spanned a range of manufacturers and efficiencies for commercially-available products that are the subject of this rulemaking. Products were selected that have characteristics of typical products on the market at a representative input capacity. Based on information gathered as part of the market and technology assessment (
see
section IV.A of this document), as well as discussions with manufacturers, DOE determined that 80 kBtu/h and 105 kBtu/h were representative input capacities for WGFs and oil furnaces, respectively. Where possible, DOE selected teardowns at those representative capacities. Where needed, catalog teardowns were also conducted to supplement the physical teardowns. DOE estimated the manufacturing cost for each furnace selected for teardown by disassembling the furnace and developing a bill of materials (“BOM”). The resulting BOM provides the basis for the MPC estimates for products at various efficiency levels spanning the full range of efficiencies from the baseline to max-tech.

To account for manufacturers' non-production costs and profit margin, DOE applies a non-production cost multiplier (the manufacturer markup) to the MPC. The resulting manufacturer selling price (“MSP”) is the price at which the manufacturer distributes a unit into commerce. DOE developed an average manufacturer markup by examining the annual Securities and Exchange Commission (“SEC”) 10-K reports filed by publicly-traded manufacturers primarily engaged in HVAC manufacturing whose combined product range includes oil and weatherized gas furnaces. The manufacturer markup estimates are consistent with the manufacturer markups developed for a final rule for furnace fan energy conservation standards published in the
Federal Register
on July 3, 2014. 79 FR 38130. Specifically, DOE estimates the industry average manufacturer markup to be 1.35 for NWOFs, 1.29 for MHOFs, and 1.27 for WGFs.

In this final determination, DOE used the same cost analysis as in the November 2023 NOPD.

a. Teardown Analysis

For the November 2023 NOPD teardown analysis, DOE used a total of 31 teardowns of consumer furnaces as the basis for calculating industry MPCs. The units DOE selected for teardown are manufactured in considerable volume, are commonly available, and have features that DOE believes are representative of the most common characteristics (
i.e.,
input capacity, configuration, and heat exchanger type) of each product class. As discussed previously, most physical teardown units had input capacities of approximately 80 kBtu/h for WGFs or 105 kBtu/h for NWOFs and MHOFs, which DOE considers to be representative of those furnace product classes. For units that were not at the representative capacity, an adjustment was developed to normalize all units to the representative capacity. To the extent possible, all major efficiency levels and technologies were captured in the selection of models for the teardown analysis. WGF and oil furnace teardowns were considered separately.

Whenever possible, DOE examined multiple models from a given manufacturer that capture different design options and used them as direct points of comparison. The teardown selections also minimized the incorporation of non-efficiency-related premium features, which otherwise could inflate the incremental manufacturing cost of achieving higher efficiency levels.

For the November 2023 NOPD, DOE examined products with a variety of indoor blower motor technologies and combustion systems (
i.e.,
single-stage, two-stage, or modulating). DOE also examined products with PSC, constant-torque BPM (“CT-BPM”), and CA-BPM indoor blower motors. As further discussed in section IV.B.2.b of this document, DOE determined the cost of including these technologies and applied the costs in the downstream analyses to estimate the manufacturing cost of going from one technology to another with higher efficiency (
e.g.,
using a CA-BPM instead of a CT-BPM, or two-stage combustion instead of single-stage combustion). Although such changes are not necessarily required due to changes in the AFUE level, DOE included these costs to better reflect the products available on the market such that it represents the products expected to be available in a scenario where the standard were set at that level.

Due to the similarity observed in NWOF and MHOF designs available in the market, DOE has found that the costs associated with increasing the energy efficiency of MHOFs are equivalent to the costs for NWOFs. A MHOF teardown was used to examine key differences between NWOFs and MHOFs and confirmed that the MPCs of MHOFs could be estimated based on the NWOF teardowns. Therefore, in the November 2023 NOPD, DOE based MPC estimates for MHOFs at each efficiency level analyzed largely on teardowns of NWOFs at that efficiency level by determining the differences between the NWOF and MHOF product classes and estimating the costs associated with those differences.

b. Cost Estimation Method

In the November 2023 NOPD, DOE assigned costs of labor, materials, and overhead to each part, whether purchased or produced in-house. DOE then aggregated single-part costs into major assemblies (
e.g.,
packaging, cabinet assembly, heat exchanger, burner system/gas train, exhaust subassembly, fan system, controls) and summarized these costs in a spreadsheet BOM. DOE repeated this same process for every physical and catalog teardown in the engineering analysis.

Analytical inputs related to manufacturer practices and cost structure play an important role in estimating the final cost of a product. DOE used inputs regarding the manufacturing process parameters (
e.g.,
equipment use, labor rates, tooling depreciation, and cost of purchased raw materials) to determine the value for each furnace component. DOE collected

information on labor rates, tooling costs, raw material prices, and other factors to use as inputs into the cost estimates. DOE determined values for these parameters using internal expertise and confidential information available to its contractors, some of which was obtained via confidential interviews with manufacturers. For purchased parts, DOE estimated the purchase price based on volume-variable price quotations and detailed discussions with manufacturers and component suppliers. DOE then summed the values of the furnace components into assembly costs and, finally, the total MPC for the entire furnace.

The MPC includes material, labor, and depreciation costs, as well as the overhead costs associated with the manufacturing facility. Material costs include both raw materials and purchased-part costs. Labor costs include fabrication, assembly, and indirect and overhead (burdened) labor rates. Depreciation costs include production equipment depreciation, tooling depreciation, and building depreciation. The overhead costs associated with the manufacturing facility include indirect process costs, utilities, equipment and building maintenance, and reworking of defective parts/units.

DOE determined the costs of raw materials based on manufacturer interviews, quotes from suppliers, and secondary research. Past results are updated periodically and/or inflated to present-day prices using indices from resources such as MEPS International,
21

PolymerUpdate,
22

the U.S. Geologic Survey (“USGS”),
23

and the U.S. Bureau of Labor Statistics (“BLS”).
24

Raw material prices for metals, such as those of stainless steel and other sheet metals, are estimated on the basis of five-year averages to smooth out spikes in demand. For other “raw” materials such as plastic resins, insulation materials,
etc.,
DOE used prices based on current market data (as of December 2022) rather than a five-year average, because non-metal raw materials have not experienced the same level of price volatility in recent years as metal raw materials.

21
For more information on MEPS International, please visit
www.meps.co.uk/
(last accessed April 15, 2024).

22
For more information on PolymerUpdate, please visit
www.polymerupdate.com
(last accessed May 9, 2024).

23
For more information on the USGS metal price statistics, please visit
www.usgs.gov/centers/nmic/commodity-statistics-and-information
(last accessed May 9, 2024).

24
For more information on the BLS producer price indices, please visit
www.bls.gov/ppi/
(last accessed May 9, 2024).

DOE characterized parts based on whether manufacturers fabricated them in-house or purchased them from outside suppliers. For fabricated parts, DOE estimated the price of intermediate materials (
e.g.,
tube, sheet metal) and the cost of forming them into finished parts. For purchased parts, DOE estimated the purchase prices paid to the original equipment manufacturers (“OEMs”) of these parts, based on discussions with manufacturers during confidential interviews. Whenever possible, DOE obtained price quotes directly from the component suppliers used by furnace manufacturers whose products were examined in the engineering analysis. DOE determined that the components in Table IV.7 are generally purchased from outside suppliers.

Table IV.7—Purchased Furnace Components

Assembly
Purchased subassemblies

Burner/Exhaust
Gas valve.

Spark igniter.

Draft inducer assembly.

Blower
Indoor blower fan blade.

Indoor blower fan motor.

Controls
Control boards.

Capacitors, transformers, contactors, switches,
etc.

Certain factory parameters, such as fabrication rates, labor rates, and wages, also affect the cost of each unit produced. DOE factory parameter assumptions were based on internal expertise and manufacturer feedback. Table IV.8 lists the factory parameter assumptions used in the analysis. For the engineering analysis, these factory parameters, including production volume, are the same at every efficiency level. The production volume used at each efficiency level corresponds with the average production volume, per manufacturer, if 100 percent of all units manufactured were at that efficiency level. This production volume was estimated based on historical shipments. These assumptions are generalized to represent typical production and are not intended to model a specific factory.

Table IV.8—Factory Parameter Assumptions

Parameter
Oil furnace estimate
WGF estimate

Actual Annual Production Volume (units/year)
5,000 units/year
500,000 units/year.

Purchased Parts Volume
5,000 units/year
100,000 units/year.

Workdays Per Year (days)
250
250.

Assembly Shifts Per Day (shifts)
1
2.

Fabrication Shifts Per Day (shifts)
2
2.

Fabrication Labor Wages ($/h)
16
16.

Assembly Labor Wages ($/h)
16
16.

Length of Shift (h)
8
8.

Average Equipment Installation Cost (% of purchase price)
10%
10%.

Fringe Benefits Ratio
50%
50%.

Indirect to Direct Labor Ratio
33%
33%.

Average Scrap Recovery Value
30%
30%.

Worker Downtime
10%
10%.

Burdened Assembly Labor Wage ($/h)
24
24.

Burdened Fabrication Labor Wage ($/h)
24
24.

Supervisor Span (workers/supervisor)
25/1
25/1.

Supervisor Wage Premium (over fabrication and assembly wage)
30%
30%.

Indoor Blower Motor Costs

As discussed in section IV.B.1.a of this document, the baseline design for WGFs includes a BPM motor. DOE research suggests that the predominant BPM indoor blower motors sold on the market today are either a CT-BPM or a CA-BPM design. Both types of motors rely on electronic variable-speed motor systems that are typically mounted in an external chassis to the back of the motor. CA-BPM motors utilize feedback control to adjust torque based on external static pressure (“ESP”) in order to maintain a desired airflow. This differentiates them from CT-BPM motors, which will maintain torque and likely decrease airflow output in environments with high ESPs. CT-BPMs are capable of achieving airflows similar to CA-BPMs but are generally less expensive. Therefore, for the November 2023 NOPD, DOE considered the baseline design to include a CT-BPM motor for the WGF product class and determined the incremental cost of a CA-BPM motor.

DOE's review of the market for the November 2023 NOPD showed that PSC motors are still being used in some NWOFs and MHOFs, so the final MPC results are presented based on a PSC motor at the baseline through 87-percent AFUE. To account for the variety of motor technologies available on the market, DOE determined the incremental cost associated with use of various types of more-efficient BPM fan motors as compared to baseline PSC motors for NWOFs and MHOFs. Additionally, for NWOFs, a CA-BPM indoor blower motor was implemented as the motor design option for the max-tech efficiency level because the only NWOF model on the market available at this level includes a CA-BPM motor, and it is unclear if this level is achievable without a constant-airflow fan. For the NWOF efficiency levels below max-tech and for all MHOF efficiency levels, DOE calculated the additional cost to switch from a PSC blower motor to either a CT-BPM motor or a CA-BPM motor. As discussed in Chapter 8 of the November 2022 Preliminary Analysis TSD, these costs are applied in the LCC and PBP analyses to determine the MPC of a furnace with each motor technology in order to better represent typical costs to consumers for NWOFs and MHOFs. CA-BPM blower motors are sometimes used as a utility-enhancing feature on units below the max-tech efficiency level. The incremental cost increases for using CT-BPM or CA-BPM motors, as compared to PSC motors, are outlined in Table IV.9.

Table IV.9—Cost Increases for BPM Blower Motors as Compared to PSC Motors

Product class

Input capacity
(kBtu/h)

Incremental cost
increase for
CT-BPM
(2022$)

Incremental cost
increase for
CA-BPM
(2022$)

NWOF, MHOF
105
$30.65
$80.48

WGF
80
37.94
59.92

Multi-Stage Furnaces

As explained in the November 2023 NOPD (
see
88 FR 83426, 83445 (Nov. 29, 2023)), the market for WGFs contains a significant number of two-stage furnaces that are rated at the same efficiency as single-stage furnaces. DOE believes consumers sometimes choose to purchase two-stage products for the additional thermal comfort offered by furnaces with multiple stages of heating output. As such, in order to better represent typical costs to consumers, DOE analyzed the cost of multiple burner stages for WGFs. DOE determined that oil units with multi-staging were rare and, thus, not representative of the market, so DOE did not analyze the cost of multiple stages for the NWOF and MHOF product classes. Where applicable, the additional cost to change to a two-stage furnace includes the added cost of a two-stage gas valve, a two-speed inducer assembly, an additional pressure switch, and additional controls and wiring. The additional cost to change to a modulating furnace includes the added cost of a modulating gas valve, an inducer assembly, an upgraded pressure switch, and additional controls and wiring. The incremental costs to implement multi-staging in WGFs are outlined in Table IV.10

Table IV.10—Multi-Stage Burner Incremental Cost Increase as Compared to Single-Stage Burner

Adder

Incremental cost
increase for
multi-stage
burners
(2022$)

Two-Stage
$21.07

Modulating
75.36

Low-NO
X
and Ultralow-NO
X
Furnaces

Some furnaces are marketed as “low-NO
X
,” which indicates that their NO
X
emissions are less than 40 nanograms of NO
X
per joule of useful heat energy (“ng/J”). Certain local jurisdictions require natural gas furnaces to comply with NO
X
emissions restrictions as low as 14 ng/J,
25

which is referred to as “ultralow-NO
X
.” A common method of reducing furnace NO
X
emissions is to slightly delay the natural gas combustion process, which in turn produces a cooler flame and results in suppressed formation of NO
X
.
26

DOE has observed during its teardown analysis that to achieve low-NO
X
operation, manufacturers implement low-NO
X
baffles. For ultralow-NO
X
operation, DOE used NWGF teardowns to approximate the cost to implement this technology option in WGFs, as DOE understands that the methodology would be the same for both product classes. Through these teardowns of NWGFs, DOE has observed that in order to achieve ultralow-NO
X
operation, the in-shot burners typically used in residential furnaces were replaced with a mesh premix burner. In

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2024-23906. Public record. Not legal advice.