# Energy Conservation Program: Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas Kitchen Ranges and Ovens, and Microwave Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3AE7-22040 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** November 15, 2007 - **Citation:** 72 FR 64432 ## Text DEPARTMENT OF ENERGY Office of Energy Efficiency and Renewable Energy 10 CFR Parts 430 and 431 [Docket No. EE-2006-STD-0127] RIN 1904-AB49 Energy Conservation Program: Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas Kitchen Ranges and Ovens, and Microwave Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers) AGENCY: Office of Energy Efficiency and Renewable Energy, Department of Energy. ACTION: Advance notice of proposed rulemaking and notice of public meeting. SUMMARY: The Energy Policy and Conservation Act (EPCA or the Act) authorizes the Department of Energy (DOE) to establish energy conservation standards for various consumer products and commercial and industrial equipment—including residential dishwashers, dehumidifiers, and electric and gas kitchen ranges and ovens and microwave ovens (hereafter referred to as “cooking products”), as well as commercial clothes washers—if DOE determines that energy conservation standards would be technologically feasible and economically justified, and would result in significant energy savings. DOE is publishing this advance notice of proposed rulemaking (ANOPR) to consider establishing energy conservation standards for these products and to announce a public meeting to receive comments on a variety of issues. DATES: DOE will hold a public meeting on December 13, 2007, starting at 9 a.m. in Washington, DC. DOE must receive requests to speak at the public meeting no later than 4 p.m., November 29, 2007. DOE must receive a signed original and an electronic copy of statements to be given at the public meeting no later than 4 p.m., December 6, 2007. DOE will accept comments, data, and information regarding the ANOPR before or after the public meeting, but no later than January 29, 2008. See section IV, “Public Participation,” of this ANOPR for details. ADDRESSES: The public meeting will be held at the Holiday Inn Capital, 550 C Street, SW., DC 20024. Any comments submitted must identify the ANOPR for Home Appliance Products, and provide the docket number EE-2006-STD-0127 and/or Regulatory Information Number (RIN) 1904-AB49. Comments may be submitted using any of the following methods: • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. • E-mail: home_appliance.rulemaking@ee.doe.gov. Include the docket number EE-2006-STD-0127 and/or RIN 1904-AB49 in the subject line of the message. • Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121. Please submit one signed paper original. • Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S. Department of Energy, Building Technologies Program, Room 1J-018, 1000 Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-2945. Please submit one signed paper original. For detailed instructions on submitting comments and additional information on the rulemaking process, see section IV of this document (Public Participation). Docket: For access to the docket to read background documents or comments received, visit the U.S. Department of Energy, Forrestal Building, Room 1J-018 (Resource Room of the Building Technologies Program), 1000 Independence Avenue, SW., Washington, DC, (202) 586-2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Please call Ms. Brenda Edwards-Jones at the above telephone number for additional information regarding visiting the Resource Room. Please note: DOE's Freedom of Information Reading Room (Room 1E-190 at the Forrestal Building) no longer houses rulemaking materials. FOR FURTHER INFORMATION CONTACT: Stephen Witkowski, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies, EE-2J, 1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-7463. E-mail: stephen.witkowski@ee.doe.gov. Francine Pinto or Eric Stas, U.S. Department of Energy, Office of the General Counsel, Forrestal Building, Mail Station GC-72, 1000 Independence Avenue, SW., Washington, DC, 20585. Telephone: (202) 586-9507. E-mail: Francine.Pinto@hq.doe.gov or Eric.Stas@hq.doe.gov. Regarding the public meeting, Brenda Edwards-Jones, U.S. Department of Energy, Building Technologies Program, Room 1J-018, 1000 Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-2945. E-mail: Brenda.Edwards-Jones@ee.doe.gov. SUPPLEMENTARY INFORMATION: I. Introduction A. Purpose of the Advance Notice of Proposed Rulemaking B. Overview of the Analyses Performed 1. Engineering Analysis 2. Energy and Water Use Characterization 3. Markups to Determine Equipment Price 4. Life-Cycle Cost and Payback Period Analyses 5. National Impact Analysis C. Authority D. Background 1. History of Standards Rulemaking for Residential Dishwashers, Dehumidifiers, and Cooking Products; and Commercial Clothes Washers 2. Current Rulemaking Process 3. Analysis Process 4. Miscellaneous Rulemaking Issues a. Joint Stakeholder Recommendations b. Standby Power for Dishwashers and Cooking Products 5. Test Procedures II. Analyses for the Four Appliance Products A. Market and Technology Assessment 1. Product Classes a. Dishwashers b. Dehumidifiers c. Cooking Products d. Commercial Clothes Washers 2. Market Assessment 3. Technology Assessment a. Dishwashers b. Dehumidifiers c. Cooking Products d. Commercial Clothes Washers B. Screening Analysis 1. Purpose a. Technological Feasibility b. Practicability To Manufacture, Install, and Service c. Adverse Impacts on Product Utility or Product Availability d. Adverse Impacts on Health or Safety 2. Design Options a. Dishwashers b. Dehumidifiers c. Cooking Products 1. Cooktops and Ovens 2. Microwave Ovens d. Commercial Clothes Washers C. Engineering Analysis 1. Approach 2. Technologies Unable To Be Included in the Engineering Analysis 3. Product Classes, Baseline Models, and Efficiency Levels Analyzed a. Dishwashers b. Dehumidifiers c. Cooking Products d. Commercial Clothes Washers 4. Cost-Efficiency Results a. Dishwashers b. Dehumidifiers c. Cooking Products d. Commercial Clothes Washers D. Energy Use and End-Use Load Characterization 1. Dishwashers 2. Dehumidifiers 3. Cooking Products a. Cooktops and Ovens b. Microwave Ovens 4. Commercial Clothes Washers E. Markups To Determine Equipment Price 1. Distribution Channels 2. Approach for Manufacturer Markups 3. Approach for Retailer and Distributor Markups 4. Sales Taxes 5. Summary of Markups F. Rebuttable Presumption Payback Periods G. Life-Cycle Cost and Payback Period Analyses 1. Approach Taken in the Life-Cycle Cost Analysis 2. Life-Cycle Cost Inputs a. Total Installed Cost Inputs b. Operating Cost Inputs c. Effective Date d. Equipment Assignment for the Base Case 3. Payback Period Inputs 4. Life-Cycle Cost and Payback Period Results H. Shipments Analysis 1. Shipments Model 2. Data Inputs 3. Shipments Forecasts I. National Impact Analysis 1. Approach 2. Base Case and Standards Case Forecasted Efficiencies 3. National Impact Analysis Inputs 4. National Impact Analysis Results J. Life-Cycle Cost Subgroup Analysis K. Manufacturer Impact Analysis 1. Sources of Information for the Manufacturer Impact Analysis 2. Industry Cash Flow Analysis 3. Manufacturer Subgroup Analysis 4. Competitive Impacts Assessment 5. Cumulative Regulatory Burden 6. Preliminary Results for the Manufacturer Impact Analysis L. Utility Impact Analysis M. Employment Impact Analysis N. Environmental Assessment O. Regulatory Impact Analysis III. Candidate Energy Conservation Standard Levels IV. Public Participation A. Attendance at Public Meeting B. Procedure for Submitting Requests To Speak C. Conduct of Public Meeting D. Submission of Comments E. Issues on Which the Department of Energy Seeks Comment 1. Microwave Oven Standby Power 2. Product Classes 3. Commercial Clothes Washer Horizontal Axis Designs 4. Compact Dishwashers 5. Microwave Oven Design Options 6. Technologies Unable To Be Analyzed and Exempted Product Classes 7. Dishwasher Efficiency and Its Impact on Cleaning Performance 8. Dehumidifier Use 9. Commercial Clothes Washer Per-Cycle Energy Consumption 10. Commercial Clothes Washer Consumer Prices 11. Repair and Maintenance Costs 12. Efficiency Distributions in the Base Case 13. Commercial Clothes Washer Shipments Forecasts 14. Base-Case and Standards-Case Forecasted Efficiencies 15. Dehumidifier Cost and Efficiency Relationships 16. Trial Standard Levels V. Regulatory Review and Procedural Requirements VI. Approval of the Office of the Secretary I. Introduction A. Purpose of the Advance Notice of Proposed Rulemaking The purpose of this ANOPR is to provide interested persons with an opportunity to comment on: 1. The product classes that the Department of Energy (DOE) is planning to analyze in this rulemaking; 2. The analytical framework, models, and tools ( e.g. , life-cycle cost (LCC) and national energy savings (NES) spreadsheets) DOE is using in performing analyses of the impacts of energy conservation standards for residential dishwashers, dehumidifiers, cooking products, and commercial clothes washers (CCWs) (collectively referred to in this ANOPR as “the four appliance products”); 3. The analyses performed for the ANOPR, including in particular the results of the engineering analyses, the LCC and payback period (PBP) analyses, and the NES and national impact analyses, which are presented in the ANOPR Technical Support Document (TSD): Energy Efficiency Standards for Consumer Products and Commercial and Industrial Equipment: Residential Dishwashers, Dehumidifiers, And Cooking Products And Commercial Clothes Washers , 1 as summarized in this ANOPR (2007 TSD); and 1 To be published on the DOE Web site at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html 4. The candidate energy conservation standard levels that DOE has developed from these analyses. B. Overview of the Analyses Performed The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq. ) directs DOE to consider establishing or amending energy conservation standards for various consumer products and commercial and industrial equipment, including the four appliance products which are the subject of this ANOPR. For each of these products, DOE conducted in-depth technical analyses for this ANOPR in the following areas: (1) Engineering, (2) energy and water use characterization, (3) markups to determine equipment price, (4) LCC and PBP, (5) shipments, (6) national impacts, and (7) preliminary manufacturer impacts. The ANOPR presents a discussion of the methodologies and assumptions utilized in these analyses. For each type of analysis, Table I.1 identifies the sections in this document that contain the results of the analysis, and summarizes the methodologies, key inputs, and assumptions for the analysis. DOE consulted with interested parties in developing these analyses, and invites further input from stakeholders on these topics. Obtaining that input is the purpose of this ANOPR. Thus, it should be noted that the analytical results presented here are subject to revision following review and input from stakeholders and other interested parties. The final rule will contain the final analytical results. Table I.1.—In-Depth Technical Analyses Conducted for the Advance Notice of Proposed Rulemaking Analysis area Methodology Key inputs Key assumptions ANOPR section for results Engineering (TSD Chapter 5): Dishwashers Dehumidifiers Efficiency level approach supplemented with design option analysis Component cost data; Performance values Analysis can be extended in subsequent analyses to product classes and efficiency levels for which the Association of Home Appliance Manufacturers (AHAM) did not provide data. Section II.C.3. Cooking Products Historical data from DOE's 1996 analysis on residential cooking products are still representative of current manufacturing costs. Commercial Clothes Washers Analysis can be extended to energy and water efficiency levels for which AHAM did not provide data. Energy and Water Use Characterization (TSD Chapter 6): Dishwashers Establish per-cycle energy and water use and then multiply by annual cycles Per-cycle energy and water use; Average annual usage of 215 cycles based on DOE test procedure; Variability of usage based on Energy Information Administration (EIA)'s Residential Energy Consumption Survey (RECS) Per-cycle water use is a direct function of per-cycle energy use (based on AHAM data). Section II.D.1. Dehumidifiers Establish daily energy use by dividing product capacity by efficiency and then multiply by annual hourly usage Per-cycle energy and water use; Average annual usage of 1095 hours based on AHAM estimates; Variability of usage based on multiple sources Average usage of 1095 hours is representative of dehumidifier use. Section II.D.2. Cooking Products Use recent survey data to estimate annual energy use Recent survey data from California and Florida—indicates a drop in annual energy use of ~40% for electric and gas ranges and ~15% for microwave ovens relative to DOE test procedure estimates; Variability of usage based on EIA's RECS Recent survey data are indicative of current household cooking habits; Historical data from DOE's 1996 analysis on residential cooking products are still representative of component energy use ( e.g. , self-cleaning, clock, ignition). Section II.D.3. Commercial Clothes Washers Establish per-cycle energy and water use and then multiply by annual cycles Per-cycle energy and water use; Average daily usage of 3.4 cycles for multi-family and 6 cycles for laundromats; Variability of usage based on multiple sources Per-cycle energy use data in DOE's 2000 TSD on residential clothes washers is representative of per-cycle drying and per-cycle machine energy for commercial washers. Section II.D.4. Markups to Determine Equipment Price (TSD Chapter 7): Dishwashers Dehumidifiers Cooking Products Commercial Clothes Washers Assess financial data from: (1) U.S. Securities and Exchange Commission (SEC) reports on appliance manufacturers to develop manufacturer markups and (2) the U.S. Census Business Expenditure Survey to develop retailer and commercial distributor markups. Use markups to transform manufacturer costs into consumer prices Distribution channels; SEC reports on appliance manufacturers; U.S. Census Business Expenditure Survey; State sales taxes; Shipments to different States Markups for baseline and more-efficient equipment are different. Section II.E. LCC and PBP (TSD Chapter 8): Dishwashers Use Monte Carlo simulation in combination with inputs that are characterized with probability distributions to establish a distribution of consumer economic impacts ( i.e. , LCC savings and PBPs) that identify the percent of Manufacturer costs; Markups (including sales taxes); Installation costs; Annual energy (and water) consumption; Energy (and water) prices and future trends; Maintenance and repair costs; Product lifetime; Discount rates Only 3% of consumers purchase dishwashers at existing minimum standards (based on AHAM data); Standards do not impact repair and maintenance costs; AEO2007 basis for energy price forecasts; Average product lifetime is 12.3 years; Average discount rate is 5.6%. II.G.4 Dehumidifiers Approximately 30% of consumers purchase dehumidifiers at existing minimum standards (based on AHAM data); Standards do not impact repair and maintenance costs; Annual Energy Outlook (AEO) 2007 basis for energy price forecasts; Average product lifetime is 11 years; Average discount rate is 5.6%. Cooking Products For gas ranges, only 18 percent of consumers purchase equipment with standing pilots; For electric cooking products and microwave ovens, 100 percent of consumer purchase equipment at baseline levels; Average product lifetime is 19 years for electric and gas ranges and 9 years for microwave ovens; Standards do not impact repair and maintenance costs; AEO2007 basis for energy price forecasts; Average discount rate is 5.6%. Commercial Clothes Washers Approximately 80 percent of consumers purchase equipment at existing minimum standards (based on AHAM data); Standards do not impact repair and maintenance costs; AEO2007 basis for energy price forecasts; Average product lifetime is 7.1 or 11.3 years depending on product application; Discount rate can be estimated by company-weighted average cost of capital. Shipments (TSD Chapter 9): Dishwashers Dehumidifiers Cooking Products Commercial Clothes Washers Forecast shipments through the use of a product stock accounting model by dividing market into segments— e.g. , new construction, replacements, and early replacements, or first-time owners; Use increases in purchase price and savings in operating costs to forecast the impact of standards on shipments Historical shipments (for calibration purposes); Historical product saturations; New construction forecasts; Survival functions (based on product lifetimes); Sensitivity to ‘relative price,' i.e. , sensitivity to the combined effect of purchase price increases, operating cost savings, and household income Market segments are: new construction, replacements, and first-time owners (existing households without the product); Sensitivity to ‘relative price' is low. Market segments are: replacements and first-time owners; Sensitivity to ‘relative price' is low. Market segments are: new construction, replacements, and early replacements; Sensitivity to ‘relative price' is low. Market segments are: new construction and replacements; New construction shipments driven by multi-family housing market only; Sensitivity to ‘relative price' is low. II.H.3. National Impacts (TSD Chapter 10): Dishwashers Dehumidifiers Cooking Products Commercial Clothes Washers. Forecast national annual energy (and water) use, national annual equipment costs, and national annual operating cost savings Annual forecasted shipments; Forecasted base case and standards case efficiencies; Per-unit annual energy (and water) consumption, Per-unit total installed costs; Per-unit operating costs; Site-to-source conversion factors for electricity and natural gas; Discount rates; Effective date of standard; and Present year Annual shipments from shipments model; Forecasted base case and standards case efficiencies remain frozen at levels in the year 2012; National Energy Modeling System (NEMS) basis for site-to-source conversion factors; Discount rates are 3 percent and 7 percent real based on Office of Management and Budget (OMB) guidelines; Future costs discounted to present year: 2007. Section II.I.4. 1. Engineering Analysis The engineering analysis establishes the relationship between the cost and efficiency of a product DOE is evaluating for standards. This relationship serves as the basis for cost and benefit calculations for individual consumers, manufacturers, and the Nation. The engineering analysis identifies representative baseline equipment, which is the starting point for analyzing technologies that provide energy efficiency improvements. Baseline equipment here refers to a model or models having features and technologies typically found in equipment currently offered for sale. The baseline model in each product class represents the characteristics of products in that class, and, for products already subject to energy conservation standards, usually is a model that just meets the current standard. After identifying the baseline models, DOE estimates their manufacturing cost, after which, DOE estimates the incremental manufacturing costs for producing more efficient equipment. For dishwashers, dehumidifiers, and CCWs, the engineering analysis uses industry-supplied cost-efficiency data, which are based on an efficiency-level approach (which calculates the relative costs of achieving increases in energy efficiency levels), and cost-efficiency curves that DOE derived based on a design-option approach (which calculates the incremental costs of adding specific design options to a baseline model). For kitchen ranges and ovens (including microwave ovens), DOE established cost-efficiency curves using its 1996 Technical Support Document for Residential Cooking Products, 2 updated to the present time in the 2007 TSD for this rulemaking, as discussed below. Some stakeholders provided comments to DOE that the design options and associated efficiency increments were still valid for cooking products other than microwave ovens. For microwave ovens, DOE analyzed current efficiency data to validate the efficiency increments specified in the 1996 technical analysis, after which it was determined that no changes to those increments were necessary. To determine manufacturing cost increments, DOE, with the concurrence of manufacturers, used producer price index (PPI) data from the Bureau of Labor Statistics (BLS) to scale costs identified in the 1996 analysis to 2006$. Section II.C on the engineering analysis discusses this cost-efficiency relationship, as well as the product classes analyzed, the representative baseline units, and the methodology to be used to extend the analysis to product classes for which DOE did not receive data 2 Available online at DOE's website: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html. 2. Energy and Water Use Characterization The energy use and water characterization provides estimates of annual energy and water consumption for the four appliance products, which DOE uses in the subsequent LCC and PBP analyses and the national impact analysis (NIA). DOE developed energy consumption estimates for all of the product classes analyzed in the engineering analysis, as the basis for its energy and water use estimates. In the case of dishwashers, DOE used the annual usage (in cycles per year) established in its test procedure to estimate the product's annual energy and water use. For dehumidifiers, DOE relied on industry-supplied estimates of annual usage (in hours per year) to estimate the product's annual energy use. For kitchen ranges and ovens, the 2004 California Residential Appliance Saturation Study (CA RASS) 3 and a year-long monitoring study conducted in 1999 by the Florida Solar Energy Center (FSEC) 4 indicate that household cooking has continued to drop since the mid-1990s; DOE used these surveys as the basis for estimating product annual energy use. For CCWs, DOE used industry-sponsored research to estimate the product's annual energy and water use. For further details on the CCW estimates, see section II.D.4 of this ANOPR. 3 California Energy Commission. California Statewide Residential Appliance Saturation Study, June 2004. Prepared for the California Energy Commission by KEMA-XENERY, Itron, and RoperASW. Contract No. 400-04-009. http://www.energy.ca.gov/appliances/rass/index.html. 4 Parker, D. S. Research Highlights from a Large Scale Residential Monitoring Study in a Hot Climate. Proceeding of International Symposium on Highly Efficient Use of Energy and Reduction of its Environmental Impact, January 2002. Japan Society for the Promotion of Science Research for the Future Program, Osaka, Japan. JPS-RFTF97P01002: pp. 108-116. Also published as FSEC-PF369-02, Florida Solar Energy Center, Cocoa, FL. http://www.fsec.ucf.edu/en/publications/html/FSEC-PF-369-02/index.htm. 3. Markups to Determine Equipment Price DOE derives consumer prices for products based on manufacturer markups, retailer markups (for residential products), distributor markups (for CCWs), and sales taxes. In deriving these markups, DOE has determined: (1) The distribution channels for product sales; (2) the markup associated with each party in the distribution channels, and (3) the existence and magnitude of differences between markups for baseline equipment (“baseline markups”) and for more-efficient equipment (“incremental markups”). DOE calculates both overall baseline and overall incremental markups based on the product markups at each step in the distribution channel. It defines the overall baseline markup as the ratio of consumer price (not including sales tax) and manufacturer cost for baseline equipment; the overall incremental markup relates the change in the manufacturer sales price of higher-efficiency models (the incremental cost increase) to the change in the retailer or distributor sales price. DOE determined manufacturer markups through the use of U.S. Securities and Exchange Commission (SEC) reports on appliance manufacturers, and used U.S. Census Business Expenditure Surveys to develop retailer and commercial distributor markups. DOE collected consumer retail prices for each of the four appliance products to provide a rough validation of its markups for baseline equipment. Baseline equipment is produced in large volumes, is not heavily laden with consumer features, and is typically competitively priced by retailers and distributors; therefore, collected retail prices of baseline equipment are likely to reflect the actual cost of producing and selling minimally-compliant products. Because DOE's approach for calculating baseline retail prices through the use of manufacturing costs, baseline markups, and sales taxes are intended to capture only the cost of producing minimally-compliant equipment, any collected baseline retail prices serve as a good check on the prices calculated through the markup approach. But because more-efficient equipment often includes non-energy related features, DOE cannot rely solely on collected retail prices for high-efficiency products to validate the prices determined through its markup approach. Current retail prices for high-efficiency equipment likely reflect the added cost of consumer amenities that have no impact on efficiency and, therefore, mask the incremental price associated with features that only affect product efficiency. 4. Life-Cycle Cost and Payback Period Analyses The LCC and PBP analyses determine the economic impact of potential standards on individual consumers. The LCC is the total consumer expense for a product over the life of the product. The LCC analysis compares the LCCs of products designed to meet possible energy-efficiency standards with the LCCs of the products likely to be installed in the absence of standards. DOE determines LCCs by considering: (1) Total installed cost to the purchaser (which consists of manufacturer costs, sales taxes, distribution chain markups, and installation cost); (2) the operating expenses of the product (determined by energy and water use, energy and water prices, and repair and maintenance costs); (3) product lifetime; and (4) a discount rate that reflects the real consumer cost of capital and puts the LCC in present value terms. The PBP represents the number of years needed to recover the increase in purchase price (including the incremental installation cost) of more-efficient equipment through savings in the operating cost of the product. It is the change in total installed cost due to increased efficiency divided by the change in annual operating cost from increased efficiency. 5. National Impact Analysis The NIA estimates both the national energy savings (NES) and the net present value (NPV) of total customer costs and savings expected to result from new standards at specific efficiency levels (referred to as candidate standard levels). In conducting the NIA, DOE calculated NES and NPV for any given candidate standard level for each of the four appliance products as the difference between a base case forecast (without new standards) and the standards case forecast (with standards). DOE determined national annual energy consumption by multiplying the number of units in use (by vintage 5 ) by the average unit energy (and water) consumption (also by vintage). Cumulative energy savings are the sum of the annual NES determined over a specified time period, which in the NIA consisted of the range of years for which the forecast was made. The national NPV is the sum over time of the discounted net savings each year, which consists of the difference between total operating cost savings and increases in total installed costs. Critical inputs to this analysis include shipments projections, retirement rates (based on estimated product or equipment lifetimes), and estimates of changes in shipments and retirement rates in response to changes in product or equipment costs due to standards. 5 The term “vintage” refers to the age of the unit in years. C. Authority Part B of Title III of EPCA established the energy conservation program for consumer products other than automobiles, including dishwashers and electric and gas kitchen ranges and ovens (which include microwave ovens). (This ANOPR refers to electric and gas kitchen ranges and ovens and microwave ovens collectively as “cooking products.”) Amendments to EPCA in the National Appliance Energy Conservation Act of 1987 (Pub. L. 100-12; NAECA) established energy conservation standards for dishwashers and cooking products, as well as requirements for determining whether these standards should be amended. (See 42 U.S.C. 6295(g) and (h), respectively) Subsequent amendments expanded Title III of EPCA to include additional consumer products and certain commercial and industrial equipment, including dehumidifiers and CCWs. In particular, sections 135(c)(4) and 136(e) of the Energy Policy Act of 2005, Public Law 109-58; (EPACT 2005) amended EPCA to authorize DOE to consider the need to modify the energy conservation standards that the Act, as amended, prescribed for dehumidifiers (42 U.S.C. 6295(cc)) and for CCWs (42 U.S.C. 6313(e)), respectively. This includes authority for DOE to amend the water efficiency standard the Act, as amended, prescribes for commercial clothes washers. Before DOE prescribes any new or amended standard for any of the four appliance products, however, it must first solicit comments on a proposed standard. Moreover, DOE must design each new or amended standard for these products to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified, and such a standard must also result in significant conservation of energy. (42 U.S.C. 6295(o)(2)(A) and (o)(3); 42 U.S.C. 6316(a)) To determine whether a proposed standard is economically justified, DOE must, after receiving comments on the proposed standard, determine whether the benefits of the standard exceed its burdens to the greatest extent practicable, weighing the following seven factors: 1. The economic impact of the standard on manufacturers and consumers of products subject to the standard; 2. The savings in operating costs throughout the estimated average life of the covered products in the type (or class) compared to any increase in the price, initial charges, or maintenance expenses for the covered products which are likely to result from the imposition of the standard; 3. The total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard; 4. Any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard; 5. The impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard; 6. The need for national energy and water conservation; and 7. Other factors the Secretary of Energy (Secretary) considers relevant. (42 U.S.C. 6295(o)(2)(B)(i); 42 U.S.C. 6316(a)) D. Background 1. History of Standards Rulemaking for Residential Dishwashers, Dehumidifiers, and Cooking Products; and Commercial Clothes Washers For dishwashers, NAECA amended EPCA to establish prescriptive standards, requiring that dishwashers be equipped with an option to dry without heat, and further requiring that DOE conduct two cycles of rulemakings to determine if more stringent standards are justified. (42 U.S.C. 6295 (g)(1) and (4)) On May 14, 1991, DOE issued a final rule establishing the first set of performance standards for dishwashers (56 FR 22250); the new standards became effective on May 14, 1994 (10 CFR 430.32(f)). DOE initiated a second standards rulemaking for dishwashers by issuing an ANOPR on November 14, 1994 (59 FR 56423). However, as a result of the priority-setting process outlined in its Procedures for Consideration of New or Revised Energy Conservation Standards for Consumer Products (the “Process Rule”) (61 FR 36974 (July 15, 1996); 10 CFR part 430, Subpart C, Appendix A), DOE suspended the standards rulemaking for dishwashers. Section 135(c)(4) of EPACT 2005 added dehumidifiers as products covered under EPCA and established standards for them that will become effective on October 1, 2007. (42 U.S.C. 6295(cc)) DOE has incorporated these standards into its regulations (70 FR 60407, 60414 (October 18, 2005); 10 CFR 430.32(v)). The amendments to EPCA also require that DOE issue a final rule by October 1, 2009, to determine whether these standards should be amended. (42 U.S.C. 6295(cc)) If amended standards are justified, they must become effective by October 1, 2012. ( Id. ) In the event that DOE fails to publish such a final rule, the EPACT 2005 specifies a new set of amended standards with an effective date of October 1, 2012. ( Id. ) As with dishwashers, NAECA amended EPCA to establish prescriptive standards for cooking products, requiring gas ranges and ovens with an electrical supply cord that are manufactured on or after January 1, 1990 not to be equipped with a constant burning pilot, and requiring DOE to conduct two cycles of rulemakings for ranges and ovens to determine if the standards established should be amended. (42 U.S.C. 6295 (h)(1)-(2)) DOE initially analyzed standards for cooking products as part of an eight-product standards rulemaking. It issued a notice of proposed rulemaking (NOPR) on March 4, 1994, proposing performance standards for gas and electric residential cooking products, including microwave ovens (59 FR 10464). In accordance with the Process Rule, DOE refined its standards analysis for cooking products. For gas cooking products, DOE focused on the economic justification for eliminating constant burning pilots. Partially due to the difficulty of conclusively demonstrating that elimination of constant burning pilots was economically justified for gas cooking products without an electrical supply cord, DOE issued a final rule on September 8, 1998, that covered only electric cooking products, including microwave ovens (63 FR 48038). The final rule found that no standards were justified for electric cooking products. DOE never completed its standards rulemaking for gas cooking products. Similar to dehumidifiers, EPACT 2005 included amendments to EPCA that added CCWs as covered equipment, and it also established standards for such equipment that is manufactured on or after January 1, 2007. (EPACT 2005, section 136(a) and (e); 42 U.S.C. 6311(1) and 6313(e)) DOE has incorporated these standards into its regulations (70 FR 60407, 60416 (October 18, 2005); 10 CFR 431.156). EPACT 2005 also requires that DOE issue a final rule by January 1, 2010, to determine whether these standards should be amended. (EPACT 2005, section 136(e); 42 U.S.C. 6313(e)) 2. Current Rulemaking Process To initiate the current rulemaking to develop standards for the four appliance products, on March 15, 2006, DOE published on its Web site the Rulemaking Framework for Commercial Clothes Washers and Residential Dishwashers, Dehumidifiers, and Cooking Products (the Framework Document). The Framework Document describes the procedural and analytic approaches DOE anticipates using to evaluate the establishment of energy conservation standards for these products. This document is available at: http://www.eere.energy.gov/buildings/appliance_standards/pdfs/home_appl_framework_31506.pdf. DOE subsequently published a notice announcing the availability of the Framework Document, inviting written public comments to be submitted by May 11, 2006, and announcing a public meeting to discuss the proposed analytical framework for this rulemaking (71 FR 15059 (March 27, 2006)). At the April 27, 2006 public meeting, DOE described the different analyses it would conduct, such as the LCC and PBP analyses, the methods proposed for conducting them, and the relationship among the various analyses. Manufacturers, trade associations, environmental advocates, regulators, and other interested parties attended the meeting. The major issues discussed at the public meeting were: (1) Relevance of the existing DOE test procedure for microwave ovens; (2) baseline unit definitions for the four appliance products; (3) product classes for the four appliance products; (4) consideration of limiting standby power as a design option for all four appliance products; (5) technology options for improving efficiency for all four appliance products; (6) type of approach to employ for the engineering analysis; (7) efficiency levels to consider for all four appliance products; (8) inclusion of a water factor for dishwashers; (9) consideration of cleaning performance in setting dishwasher standards; (10) implications of clothes container volume on CCW efficiency; (11) proposed approaches for specifying typical annual energy and water consumption for all four products; (12) potential data sources for characterizing variability in annual energy and water consumption; (13) typical distribution channels and markups for all four appliance products; (14) data sources for retail prices; (15) type of approach to employ for the LCC and PBP analyses; (16) variability of forecasted energy and water prices; (17) repair, maintenance, and installation cost relationship to product efficiency; (18) product lifetimes; (19) development of consumer discount rates; (20) purchase price impacts on product shipments; (21) forecasted saturation rates of commercial clothes washers; (22) consumer subgroups; (23) water and wastewater utility impacts; and (24) wastewater discharge impacts. Written comments submitted during the Framework Document comment period elaborated on the issues raised at the meeting and also addressed other major issues, including the following: (1) Transparency of manufacturer cost data development; (2) engineering data availability for dishwashers, kitchen ranges and ovens, and CCWs; and (3) inclusion of embedded energy in supplying water and treating wastewater. DOE developed two spreadsheet tools for this rulemaking. The first tool calculates LCC and PBPs. There are six LCC spreadsheets, one each for the following products: (1) Dishwashers, (2) dehumidifiers, (3) cooktops, (4) ovens, (5) microwave ovens, and (6) CCWs. Each of the LCC spreadsheets includes product efficiency distributions and has the capability to determine LCC savings and PBPs based on average values. The spreadsheets also can be combined with Crystal Ball (a commercially available software program) to generate a Monte Carlo simulation, which incorporates uncertainty and variability considerations. The second tool (the NIA spreadsheet tool) calculates the impacts of candidate standards at various levels on shipments and calculates the NES and NPV at various candidate standard levels. There are five NIA spreadsheets, one each for the following products and combinations of products: (1) Dishwashers, (2) dehumidifiers, (3) cooktops and ovens, (4) microwave ovens, and (5) CCWs. DOE posted these spreadsheets on its Web site on December 4, 2006, for early stakeholder review and comment. 6 6 Available online at DOE's Web site: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html Comments received since publication of the Framework Document have helped identify issues involved in this rulemaking, and have provided information that has contributed to DOE's proposed resolution of these issues. This ANOPR quotes and summarizes many of these public comments. A parenthetical reference at the end of a quotation or paraphrase provides the location of the item in the public record. 3. Analysis Process Table I.2 sets forth the analyses DOE has conducted and intends to conduct in its evaluation of standards for CCWs, and residential dishwashers, cooking products, and dehumidifiers. Until recently, DOE performed the manufacturer impact analysis (MIA) in its entirety between the ANOPR and NOPR during energy conservation standards rulemakings. As noted in the table, however, DOE has performed a preliminary MIA for this ANOPR. DOE believes this change will improve the rulemaking process. Table I.2.—The Four Appliance Products—Analysis Process ANOPR NOPR Final rule Market and technology assessment Revised ANOPR analyses Revised analyses. Screening analysis Life-cycle cost sub-group analysis Engineering analysis Manufacturer impact analysis Energy use and end-use load characterization Utility impact analysis Markups for equipment price determination Net national employment impacts Life-cycle cost and payback period analyses Environmental assessment Shipments analysis Regulatory impact analysis National impact analysis Preliminary manufacturer impact analysis The analyses listed in Table I.2 reflect analyses used in the rulemaking, including the development of economic models and analytical tools. In addition, in an effort to support groups of interested parties seeking to develop and present consensus recommendations on standards, DOE posted draft versions of its LCC and NIA spreadsheets on its Web site. If timely new data, models, or tools that enhance the development of standards become available, DOE will incorporate them into this rulemaking. 4. Miscellaneous Rulemaking Issues a. Joint Stakeholder Recommendations The Edison Electric Institute (EEI) suggested that DOE should use a negotiated rulemaking process for residential dishwashers and cooking equipment, because manufacturers appear to want regulatory certainty for these products. EEI suggested a separate negotiated process for CCWs because these products are designed for a different market. For dehumidifiers, EEI suggested DOE analyze the standards identified in EPACT 2005 that are due to become effective in 2012, and if they are technically feasible, economically justified, and will not reduce competition, consider a negotiated rulemaking so that standards can be issued before the October 1, 2009 deadline mandated by EPACT 2005. (EEI, No. 7 at p. 2) 7 7 A notation in the form “EEI, No. 7, p. 2” identifies a written comment that DOE has received and has included in the docket of this rulemaking. This particular notation refers to a comment (1) by the Edison Electric Institute, (2) in document number 7 in the docket of this rulemaking, and (3) appearing on page 2 of document number 7. The Process Rule specifically identifies “consensus proposals for new or revised standards as an effective mechanism for balancing the economic, energy, and environmental interests affected by standards. Thus, notwithstanding any other policy on selection of proposed standards, a consensus recommendation on an updated efficiency level submitted by a group that represents all interested parties will be proposed by DOE if it is determined to meet the statutory criteria.” (10 CFR Part 430, Appendix A to Subpart C, section 5(e)(2)). Therefore, DOE encourages the submittal of any consensus proposals or joint stakeholder recommendations pertaining to any or all of the four appliance products. If the supporting analyses provided by the group address all of the statutory criteria and use valid economic assumptions and analytical methods, DOE expects to use these supporting analyses as the basis of a proposed rule. b. Standby Power for Dishwashers and Cooking Products Standby power is currently incorporated into the energy factor 8 (EF) for conventional ovens via the measurement of clock power consumption and for gas cooktops via the energy consumption of constant burning pilots, both of which are incorporated into the EF calculation for their respective products. The dishwasher test procedure includes a measurement of standby power, but standby energy use is not incorporated into calculated EF. The issue of whether to include standby power in the energy efficiency metrics for dishwashers and cooking products was addressed in several comments that DOE received. The Alliance to Save Energy, American Council for an Energy-Efficient Economy (ACEEE), Appliance Standards Awareness Project, Natural Resources Defense Council, and Northeast Energy Efficiency Partnerships (hereafter “Joint Comment”) stated that standby energy use should be included in the analyses for all products, with the appropriate metric for the standards being annual energy consumption rather than energy factor. The Joint Comment stated that EPACT 2005 instructs DOE to consider standby power in its rulemaking for all products, and where significant, to include standby power in some fashion into the appropriate standard. The Joint Comment further stated that standby energy use can be significant for clothes washers, dishwashers, and microwave ovens. (Joint Comment, No. 9 at p. 2) 8 Energy factor (EF) is a measure of the energy consumption required by the product under the conditions of the DOE test procedure. The units of EF vary depending on the product. For example, the EF for dishwashers is expressed in cycles/kWh, while the EF for dehumidifiers is in liters/kWh. For dishwashers, Potomac Resources Inc. (Potomac) commented that it would be useful to address standby power directly through design options such as the power supply. (Public Meeting Transcript, No. 5 at p. 61) 9 ACEEE, EEI, and Whirlpool Corporation (Whirlpool) agreed that standby power is important to include in the energy use calculations, but EEI and Whirlpool argued that individual system components should not be regulated, instead stating that standby power should be addressed for the system as a whole. (Public Meeting Transcript, No. 5 at pp. 62, 64, and 66) ACEEE commented that if standby energy use is determined to be significant, then DOE's analysis should include design options, efficiency levels, or increased annual energy consumption to capture efficiency improvement opportunities. (Public Meeting Transcript, No. 5 at p. 64) ACEEE, the Association of Home Appliance Manufacturers (AHAM), and Whirlpool stated that if DOE incorporates standby power into the efficiency standard, it should do this through maximum annual energy usage rather than a prescriptive standby power level. These commenters argued that such an approach would allow manufacturers flexibility in meeting the standard. (Public Meeting Transcript, No. 5 at p. 125; AHAM, No. 14 at p. 8; Whirlpool, No. 10 at p. 8) Whirlpool further commented that if standby power is included in annual energy consumption, DOE should add 8.5 kilowatt-hours (kWh) to the standard, equating to one watt standby power per covered appliance over the course of a year. In addition, Whirlpool argued that standby power should not be driven so low that it impacts the adoption of electronics that can shift start times to off-peak periods. (Whirlpool, No. 10 at p. 8) 9 A notation in the form “Public Meeting Transcript, No. 5 at p. 61” identifies an oral comment that DOE received during the April 27, 2006, Framework public meeting and which was recorded in the public meeting transcript in the docket for this rulemaking (Docket No. EE-2006-STD-0127), maintained in the Resource Room of the Building Technologies Program. This particular notation refers to a comment (1) made during the public meeting, (2) recorded in document number 5, which is the public meeting transcript that is filed in the docket of this rulemaking, and (3) which appears on pages 61 of document number 5. In response to the comments, we note that the analysis DOE conducted for dishwashers does not explicitly consider design options to reduce standby energy consumption. DOE conducted the engineering analysis to capture the costs associated with improving EF only. The cost data AHAM provided and the product teardowns did not specifically account for changes in standby power. The LCC analysis, however, does account for standby power in the calculation of annual energy consumption. The LCC assumes a baseline standby power draw of two watts, totaling 17 kWh of annual energy consumption. DOE assumes this same consumption level at all EF values. If technologies to decrease standby power consumption are determined to be a significant source of energy savings and are technologically feasible and economically justified, DOE plans to consider standby power as part of an overall energy efficiency standard focusing on maximum annual energy usage, rather than a separate standby power level, in order to allow manufacturers maximum flexibility in specifying features and design options while still remaining below a certain annual energy consumption level. As one approach, DOE tentatively believes that a reduction in the two-watt baseline standby power level could be reflected in a corresponding reduction in annual energy usage, which could be modeled for the purposes of this analysis as an equivalent change in EF. DOE seeks comment on the specification of annual energy usage as the metric for dishwasher standards. ACEEE commented during the Framework public meeting that the use of standby power needs to be considered for all cooking products. (Public Meeting Transcript, No. 5 at p. 91) AHAM recognized that standby power consumption is essentially already included in the test procedure for ovens and cooktops; however, for microwave ovens, a test procedure revision would be required. (Public Meeting Transcript, No. 5 at p. 92) AHAM also stated that manufacturers (driven by consumer/market desires) want the flexibility to produce microwave ovens with different displays, and, thus, different levels of standby power consumption, in order to provide products with market differentiation. Therefore, AHAM recommended that standby power not be considered as a separate prescriptive requirement, but instead, if regulated, standby power should be incorporated in an annual energy consumption metric (AHAM, No. 17 at p. 4). Contrary to these views, GE Consumer & Industrial (GE) opposed incorporating standby power into efficiency standards because that would result in a determination of higher energy consumption under the regulation for “intelligent” appliances. (GE, No. 13 at p. 4) DOE added low-standby-power electronic controls as design options for both standard and self-cleaning gas ovens, as well as for both standard and self-cleaning electric ovens. However, it did not include these design options when setting overall efficiency levels for these products because DOE does not have efficiency improvement or incremental cost information on them. DOE is seeking data to conduct this analysis and requests stakeholder comment on this issue. AHAM provided data on microwave standby power for a sample of 21 microwave ovens available in the U.S. market. For the AHAM submission, standby power was tested in accordance with International Electrotechnical Commission (IEC) 62301-2005, Household electrical appliances—Measurement of standby power . These data show a wide range of standby power use. Microwave oven standby power consumption is understood to be a function of the digital clock display, with more complex graphical displays drawing more power. AHAM did not provide the type of oven characteristics information which could provide more insight into the factors affecting standby power or the costs associated with reducing the standby energy consumption. For the NOPR analysis, DOE is considering purchasing, testing, and analyzing microwave ovens to better understand the utility, cost, and cost implications of reducing standby power consumption. Addition of a standby power test to the existing test procedure would be necessary before standby power could be included in an efficiency standard. DOE intends to modify the test procedure accordingly because it believes that standby power represents a significant portion of microwave oven annual energy usage. According to the DOE test procedure, the annual useful cooking energy output of a microwave oven is 79.8 kWh. For a baseline microwave oven with an efficiency of 55.7 percent, annual energy consumption for cooking processes is 143.3 kWh. Each watt of standby power represents an additional 8.76 kWh per year, or 6 percent of the annual cooking energy consumption. AHAM-supplied data demonstrated a wide variation in existing standby power levels, with values ranging between 1.5 and 5.8 watts, such that the likely impact of a standard would be significant. DOE will conduct testing and teardown analysis in support of the test procedure NOPR to incorporate standby power. DOE plans to complete the test procedure change prior to publishing the NOPR for this standard-setting rulemaking. DOE specifically seeks data and stakeholder feedback on how to conduct an analysis of standby power for microwave ovens. This is identified as Issue 1 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. 5. Test Procedures A test procedure outlines the method to determine the energy efficiency and annual energy use of products and equipment, and it is used as the basis for representation and determination of compliance with energy conservation standards. Section 7(b) of the Process Rule provides that DOE will propose necessary modifications to the test procedures for a product before issuing an ANOPR concerning energy conservation standards for that product. Section 7(c) of the Process Rule states that DOE will issue a final modified test procedure prior to issuing a proposed rule for energy conservation standards. DOE has established test procedures for each of the four appliance products subject to today's notice. DOE last revised its test procedures for cooking products in 1997, to make several revisions to more accurately measure the efficiency of these products (62 FR 51976 (Oct. 3, 1997); 10 CFR part 430, Subpart B, Appendix I). Similarly, in 2003, DOE revised its test procedures for dishwashers to more accurately measure their efficiency, as well as their water use (68 FR 51887 (Aug. 29, 2003); 10 CFR part 430, Subpart B, Appendix C). At this time, DOE does not expect to make further changes to the dishwasher test procedure. EPACT 2005 amended EPCA to require that CCWs be rated according to the same test procedures established for residential clothes washers. (EPACT 2005, section 136(f); 42 U.S.C. 6314(a)(8)) DOE adopted those test procedures for CCWs in its final rule published on October 18, 2005 (70 FR 60407, 60416). EPACT 2005 also amended EPCA to specify that the U.S. Environmental Protection Agency (EPA) test criteria used under the Energy Star Program must serve as the basis for DOE's test procedure for dehumidifiers. (EPACT 2005, section 135(b); 42 U.S.C. 6293(b)(13)) The Energy Star test criteria for dehumidifiers require that American National Standards Institute (ANSI)/AHAM Standard DH-1-2003, Dehumidifiers , be used to measure energy use during capacity-rating tests, and that the Canadian Standards Association (CAN/CSA) standard CAN/CSA-C749-1994 (R2005), Performance of Dehumidifiers , be used to calculate the energy factor. DOE has adopted these test criteria, along with related definitions and tolerances, as its test procedure for dehumidifiers (71 FR 71340, 71347, 71366, 713667-68 (Dec. 8, 2006); 10 CFR part 430, Subpart B, Appendix X). DOE received comments pertaining to its test procedures for kitchen ranges and ovens and CCWs. With regard to kitchen ranges and ovens, Wolf Appliance Company, LLC , an affiliate of Sub-Zero Freezer Company, Inc. (Wolf), and Whirlpool suggested that DOE modify its test procedure for residential kitchen ranges and ovens because it is inadequate for measuring the energy use of certain product characteristics and features. Specifically, Wolf stated that the current test procedure does not accurately measure the performance and efficiency of several components (such as larger burner rings, heavier burner grates, and high performance convection systems). (Wolf, No. 6 at p. 1) Whirlpool stated that the current test procedure does not measure energy consumption as a function of oven cavity size, does not address the fundamental differences in commercial-type products 10 versus more traditional residential cooking products, and does not recognize that gas surface burner efficiency is a function of the burner rate. Whirlpool added that the microwave oven test procedure does not account for the variation in the product's size and wattage, both of which affect microwave oven energy consumption. (Whirlpool, No. 10 at p. 6) With regard to CCWs, Whirlpool noted that commercial laundry practices differ from the more familiar residential practices in several key respects ( e.g. , the test procedure assumes that a modest eight-pound load will be used, but commercial washers typically are filled with a larger load). (Whirlpool, No. 10 at p. 3) 10 Commercial-type cooktops and ovens are characterized by higher burner firing rates, larger dimensions, and heavier components than typical residential cooking products. In response, DOE recognizes that there may be issues with its test procedures for measuring the energy use impacts of the cooking product characteristics noted by Wolf and Whirlpool. However, with the exception of standby power consumption for microwave ovens, DOE does not intend to initiate rulemakings to modify its test procedures for appliances covered by this rulemaking, before finalizing amended energy conservation standards, for the reasons that follow. DOE intends to initiate a test procedure modification for microwave ovens to include standby power consumption because the data received from AHAM indicates that standby power represents a significant portion of annual energy usage and because the data shows a wide spread in current standby power levels. DOE does not plan a test procedure change for conventional ovens because the oven test procedure already measures standby power in the form of clock power and, for standard gas ovens, the pilot light. For cooktops, DOE does not believe that standby power not already captured in the test procedure represents a significant portion of annual energy consumption. Gas cooktops already measure the energy consumption of standing pilots, which for the baseline configuration are assumed to consume 600 kWh annually and which are in addition to the annual cooking energy consumption. In comparison, each watt of standby power consumes 8.76 kWh annually. For electric cooktops, DOE does not have any data on standby power consumption that indicate the potential for significant energy savings. Therefore, a test procedure change to measure standby power for cooktops would not be warranted. With regard to CCWs, although for efficiency rating purposes CCWs use the residential clothes washer test procedure, DOE's methods for characterizing the energy and water use for commercial washers (as described in section II.D.4) accounted for the consumer usage patterns specific to this product. DOE specifically seeks data and stakeholder feedback on the decision to retain the existing test procedures for appliances covered under this rulemaking other than microwave ovens. This is identified as Issue 6 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. II. Analyses for the Four Appliance Products This section addresses the analyses DOE has performed and intends to perform for this rulemaking. For each product covered by this rulemaking ( i.e. , residential dishwashers, dehumidifiers, and cooking products, and CCWs), DOE will perform a set of separate analyses, including a market and technology assessment, a screening analysis, an engineering analysis, an energy use and water use characterization, LCC and PBP analyses, a shipments analysis, a NIA, and a MIA. A separate sub-section addresses each type of analysis, which contains a general introduction that describes the analysis and a discussion of related comments received from interested parties. A. Market and Technology Assessment When DOE begins a standards rulemaking, it develops information that provides an overall picture of the market for the products concerned, including the nature of the product, the industry structure, and market characteristics for the product. This activity consists of both quantitative and qualitative efforts based primarily on publicly available information. The subjects addressed in the market and technology assessment for this rulemaking include product classes, baseline units, technologies for design options, manufacturers, quantities and types of products sold and offered for sale, retail market trends, industry cost structure, and regulatory and non-regulatory programs. This information serves as resource material throughout the rulemaking. 1. Product Classes In general, when evaluating and establishing energy efficiency standards, DOE divides covered products into classes by: (1) The type of energy used, and (2) capacity or other performance-related features that affect consumer utility and efficiency. Different energy conservation standards may apply to different product classes. The following describes and discusses the product classes DOE plans to use in this rulemaking. a. Dishwashers For dishwashers, the size of the unit significantly affects the amount of energy consumed due to the corresponding amount of water heating required. In other words, standard-sized dishwashers with relatively greater water consumption have significantly greater energy use than compact units. Because standard dishwashers offer enhanced consumer utility over compact units ( i.e. , the ability to wash more dishes), DOE has established the following product classes, which are based on the size of the dishwasher (as specified in ANSI/AHAM Standard DW-1-2005, Dishwashers): • Compact (capacity less than eight place settings plus six serving pieces); and • Standard (capacity equal to or greater than eight place settings plus six serving pieces). AHAM and EEI both commented that the two product classes are appropriate for the analysis. (Public Meeting Transcript, No. 5 at p. 55; AHAM, No. 14 at p. 8; EEI, No. 7 at p. 3) Potomac, however, suggested that the standard product class should be disaggregated to at least several product classes based on place-setting capacity. (Public Meeting Transcript, No. 5 at pp. 61-62). American Rivers, Association of Metropolitan Water Agencies, Austin Water Utility, California Urban Water Conservation Council, East Bay Municipal Utility District, and Seattle Public Utilities (hereafter “Multiple Water Organizations”) recommended that one or more new product classes be defined in addition to compact and standard sizes, which would allow flexibility for manufacturers to make smaller or larger machines. According to the Multiple Water Organizations, consumers would then be encouraged to wash full dishwasher loads rather than partial or multiple loads. (Multiple Water Organizations, No. 11 at p. 2) DOE notes that current dishwasher models include single- and two-drawer units as well as dishwashers that provide a user-selectable option for upper-or lower-rack-only washing to aid in running optimal load sizes. Therefore, DOE believes the current two product classes offer adequate flexibility in terms of dishwasher loading to maintain consumer utility and wash performance for different load sizes. Thus, additional product classes are not warranted. b. Dehumidifiers EPACT 2005 sets energy conservation standards for dehumidifiers based on the capacity of the unit as measured in pints of water extracted per day. (EPACT 2005, section 135(c); 42 U.S.C. 6295(cc)) Specifically, for units manufactured on or after October 1, 2007, EPACT 2005 sets a separate standard for dehumidifiers in each of the following five categories: (1) 25.00 pints/day or less, (2) 25.01-35.00 pints/day, (3) 35.01-54.00 pints/day, (4) 54.01-74.99 pints/day, and (5) 75.00 pints/day or more. ( Id. ) EPACT 2005 also prescribes more stringent energy conservation standards that would go into effect if DOE fails to issue amended standards that apply to products manufactured on or after October 1, 2012. ( Id. ) In prescribing these standards, EPACT 2005 subdivides the 35.01-54.00 pints/day category into two categories: 35.01-45.00 pints/day and 45.01-54.00 pints/day. Therefore, in accordance with EPACT 2005 amendments to EPCA, DOE is using the following product classes for dehumidifiers: • 25.00 pints/day or less; • 25.01-35.00 pints/day; • 35.01-45.00 pints/day; • 45.01-54.00 pints/day; • 54.01-74.99 pints/day; and • 75.00 pints/day or more. During the Framework public meeting and Framework comment period, stakeholders differed as to appropriate specifications for the product classes for dehumidifiers. EEI asked whether a distinction should be made between fixed and portable dehumidifers. (EEI, No. 7 at p. 3) AHAM opposed EEI's suggestions, expressing a preference for the product classes as identified in EPACT 2005. (Public Meeting Transcript, No. 5 at p. 70; AHAM, No. 14 at p. 9) While fixed and portable dehumidifiers offer different utility in terms of ease of installation and flexibility in location, DOE is unaware of any dehumidification performance differences. Therefore, DOE has determined that additional product classes are not warranted based on portability, and for the purpose of this rulemaking, DOE intends to maintain the dehumidifier product classes as defined by EPACT 2005 ( i.e. , a “self-contained, electrically operated, and mechanically encased assembly”). (EPACT 2005, section 135(a); 42 U.S.C. 6291(34)) DOE also received comments that baseline unit characteristics for dehumidifiers may not be possible to establish since EPACT 2005 will not come into effect until October 1, 2007. DOE performed its engineering analysis across a wide range of unit capacities and efficiencies to capture as complete a picture of the 25-75 pints/day dehumidifier market as possible. In total, DOE has disassembled and analyzed 14 dehumidifiers to date. Furthermore, DOE used market and technology assessment research and consulted with numerous stakeholders to determine basline unit characteristics. (Refer to Chapters 3 and 5 of the TSD for further details.) DOE intends to use EPACT 2005-compliant dehumidifiers as a baseline since manufacturers are already modifying any non-compliant product they have to meet this new minimum energy efficiency level. c. Cooking Products For cooking products, DOE based its product classes on energy source ( i.e. , gas or electric) and cooking method ( i.e. , cooktops, ovens, and microwave ovens). DOE identified five categories of cooking products: • Gas cooktops; • Electric cooktops; • Gas ovens; • Electric ovens; and • Microwave ovens. In its regulations implementing EPCA, DOE defines a “conventional range” as “a class of kitchen ranges and ovens which is a household cooking appliance consisting of a conventional cooking top and one or more conventional ovens.” 10 CFR 430.2. In this rulemaking, DOE is not treating gas and electric ranges as a distinct product category and is not basing its product classes on that category. Because ranges consist of both a cooktop and oven, any potential cooktop and oven standards would apply to the individual components of the range. As a result, product classes for ranges, for the purpose of standards-setting, are not warranted. This general approach for defining product classes was validated in comments received after the Framework public meeting. EEI stated that the product classes are appropriate. (EEI, No. 7 at p. 3) Wolf stated that the burden of considering new product classes since the previous rulemaking (including modification of existing test procedures) is not justified by the small potential energy savings. (Wolf, No. 6 at p. 2) DOE also received comments during the Framework public meeting and subsequent comment period questioning whether DOE should consider for analysis product classes for cooking products with small shipment volumes. Whirlpool noted that the rationale for excluding certain product classes from analysis in the previous rulemaking ( e.g. , grills, griddles, induction cooktops, and warming/simmering burners) was based upon consideration of factors such as the lack of an appropriate test procedure, the niche nature of those products, and the small amount of empirical data. Since these conditions still remain today, Whirlpool commented that DOE should not analyze these classes. (Whirlpool, No. 10 at p. 5) Wolf stated during the Framework public meeting that product classes that were not analyzed in the prior rulemaking need to be considered in this standards rulemaking. (Public Meeting Transcript, No. 5 at p. 84) DOE is not aware of any data upon which to determine the measurement of energy efficiency or energy efficiency characteristics of products in these niche classes. Therefore, DOE will not conduct analyses on product classes that were identified but excluded in the previous rulemaking. DOE seeks efficiency data and inputs to characterize any limitations of the test procedure for these product classes. This topic is identified as Issue 6 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. The single product class that DOE proposes to use for gas cooktops is gas cooktops/conventional burners, in accordance with the previous rulemaking. AHAM commented that if DOE decides to proceed with further analysis of cooking products, DOE should include an additional product class for high-performance, commercial-style products. AHAM stated that the unique utility and performance attributes associated with high-performance cooking products must be recognized and allowed to continue under the “safe harbor” provisions of NAECA, which prevent Federal energy efficiency standards from resulting in the unavailability of product types, classes, performance characteristics, and other key aspects of the product that are currently available. (42 U.S.C. 6295 (o)(4)) Due to test procedure complexities and small market share, AHAM recommends that DOE exempt high-performance, commercial-style residential cooking products. (AHAM, No. 14 at p. 2) DOE received additional comments specifically regarding commercial-type ranges. These comments are discussed in the context of gas cooktops, although it should be recognized that similar responses apply to the oven component of the range as well. During the Framework public meeting, EEI suggested a need to establish the market share of commercial-type ranges for this rulemaking. (Public Meeting Transcript, No. 5 at p. 81) Both AHAM and Wolf stated that commercial-type ranges warrant a separate product class. (Public Meeting Transcript, No. 5 at pp. 84 and 86). Wolf further elaborated in the comment period after the Framework public meeting that the unique utility and performance attributes of commercial-type ranges (explained below) justify a separate product class. (Wolf, No. 6 at p. 1) DOE considers commercial-style ranges to be those products which incorporate gas cooktops with higher input rate burners ( i.e. , greater than 14,000 Btu/h) and heavy-duty grates that provide faster cooking and the ability to cook larger quantities of food in larger cooking vessels. The burners are optimized for the larger-scale cookware to maintain high cooking performance. Similarly, DOE considers commercial-style ovens to have higher input rates ( i.e. , greater than 22,500 Btu/h) and dimensions to accommodate larger cooking utensils or greater quantity of food items, as well as features to optimize cooking performance. GE stated that commercial-type products should be exempt from regulation due to their unique utility and cost, but if they are regulated, they should be categorized into a separate product class. (GE, No. 13 at p. 2) Whirlpool commented that, although shipments of commercial-type products have increased since the prior rulemaking, they still remain a niche product. Whirlpool shared GE's position that these products should be exempt from regulation, particularly since there is a lack of efficiency data available and there is little potential for meaningful energy savings. (Whirlpool, No. 10 at p. 6) After considering stakeholder comments, DOE has tentatively decided to exclude high-performance, commercial-style gas cooktops (including the cooktop component of commercial-style ranges) from the energy efficiency standard due to the lack of available data for determining efficiency characteristics of those products. In addition, the test procedure for gas cooktops is based on measuring temperature rise in an aluminum block with a diameter dictated by the firing rate of the burner. The maximum diameter of the test block is sufficient to measure higher output residential-scale burners. For commercial-type burners that must have larger diameter burner rings to accomplish complete combustion, however, this maximum test block diameter may be too small to achieve proper heat transfer and may not be representative of the dimensions of suitable cookware. However, DOE is not aware of any data to determine the measurement of energy efficiency or energy efficiency characteristics for commercial-style cooktops. DOE seeks data and inputs regarding the energy efficiency of commerical-type cooktops as well as any limitations of the test procedure for this product class. This topic is identified as Issue 6 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. Whirlpool and AHAM commented that DOE should add sealed gas burners as a separate product class. (Public Meeting Transcript, No. 5 at pp. 82 and 85) Whirlpool stated that the added utility of sealed burners based upon the ease of consumer cleaning justifies this distinction. In addition, the increasing firing rates of sealed burners since the previous rulemaking coupled with the necessary grate height increase to achieve proper combustion make sealed burners less efficient than open burners. Whirlpool cited the 1983 International Gas Research Conference (IGRC) 11 report that claimed an efficiency reduction associated with sealed burners. In Whirlpool's opinion, the boiling water tests upon which this conclusion was based represented an inappropriate metric, and any efficiency determination for sealed burners must be based on the DOE test procedure. For these reasons, Whirlpool recommended development of a separate product class for sealed burners. (Public Meeting Transcript, No. 5 at pp. 82-83 and 88) AHAM stated that gas sealed burners should be considered as a separate product class within gas cooktops because changes are required to provide appropriate amounts of primary and secondary air for proper combustion, which inherently affects energy efficiency. (AHAM, No. 14 at p. 2) DOE has observed that there are conflicting data on the impacts of sealed burners on energy efficiency measurements. In the previous rulemaking, AHAM had stated that sealed burners often have a lower gas input rating than conventional burners due to the reduction in secondary air. The sealed burner must obtain all of its secondary air from air that is available above the cooktop. To obtain sufficient air for proper combustion, it becomes necessary to either raise the grate height or to derate the burner. The IGRC report, however, states that the reduction in secondary air results in more primary aeration to the sealed burner. The increased primary aeration allows for a reduced pan-to-burner separation and increased burner efficiency. According to the boiling water tests conducted in the report, the efficiency of conventional burners ranged from 42 percent to 48 percent, while the sealed burner was rated at an efficiency of 53 percent. Commenters have not provided data showing the correlation of boiling water tests with efficiency testing according to the DOE test procedure, as would render the IGRC report inapplicable. Accordingly, without clear indication that the performance of sealed burners is sufficiently distinct from that of conventional open gas burners, DOE will retain the single product class for gas cooktops and consider sealed burners as a design option within that class. The American Gas Association (AGA) also proposed two product classes for gas cooktops, differentiated by the method of heat transfer associated with the burners. The two product classes suggested by the AGA would consist of direct-flame contact burners that provide conductive heat transfer and other burner types that employ convective and radiant heat transfer. (AGA, No. 12 at p. 2) DOE believes that the method of heat transfer does not provide any unique utility, nor are there data available that characterize substantially different performance based on heat transfer means. Thus, DOE will retain a single product class for gas cooktops. For electric cooktops, DOE determined that the ease of cleaning smooth elements means that they have greater utility to the consumer than coil elements. Because smooth elements typically use more energy than coil elements, DOE has defined the following product classes for electric cooktops: • Electric cooktop/low or high wattage open (coil) elements; and • Electric cooktop/smooth elements. 11 J. Flood and T. Enga, “Energy Conservation `Aspects of Cooking Appliances,” Proceedings of the 1983 International Gas Research Conference, June 13, 1983, London, UK, pp 741-54. Available online at: http://www.osti.gov/energycitations. AHAM stated that if DOE decides to proceed with further analysis of cooking products, DOE should include an additional product class for induction cooktops. AHAM commented the utility and performance attributes associated with high-performance cooking products must be recognized and allowed to continue under the safe harbor provisions of NAECA. Due to test procedure complexities, small market share, and lack of empirical data, AHAM and Whirlpool recommended that DOE exempt induction cooktops. Whirlpool further commented that if induction cooktops are analyzed, they must be treated as a separate product class, which would entail development of a new test procedure. (Public Meeting Transcript, No. 5 at p. 85; AHAM, No. 14 at pp. 2-4; Whirlpool, No. 10 at p. 5) During the engineering analysis (Chapter 5 of the TSD) DOE determined that induction cooktops cannot be tested according the existing test procedure, and, therefore, DOE will not consider this technology for the ANOPR analysis. DOE seeks efficiency data and inputs to characterize any limitations of the test procedure for induction cooktops. This topic is identified as Issue 6 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. For electric ovens, DOE determined that the type of oven-cleaning system is a utility feature that affects performance. DOE found that standard ovens and ovens using a catalytic continuous-cleaning process use roughly the same amount of energy. On the other hand, self-cleaning ovens use a pyrolytic process that provides enhanced consumer utility with different overall energy consumption, as compared to either standard or catalytically-lined ovens, due to the amount of energy used during the cleaning cycle and better insulation. Thus, DOE has defined the following product classes for electric ovens: • Electric oven/standard oven with or without a catalytic line; and • Electric oven/self-clean oven. AHAM concurred with this approach during the Framework public meeting, stating that non-self-cleaning and self-cleaning ovens should remain as separate product classes. (Public Meeting Transcript, No. 5 at pp. 85-86) AHAM and Whirlpool both commented that the feature of a “catalytic line” is obsolete and, therefore, should be removed from the non-self-cleaning oven product class description. (Public Meeting Transcript, No. 5 at p. 86; Whirlpool, No. 10 at pp. 9-10) While DOE is not aware of any electric ovens currently on the market that are catalytically lined, it will retain the current description for completeness. For gas ovens, for the same reasons as for electric ovens, DOE is using the following product classes: • Gas oven/standard oven with or without a catalytic line; and • Gas oven/self-clean oven. AHAM stated that if DOE decides to proceed with further analysis, DOE should include additional product classes for high-performance, commercial-style products, which include commercial-style gas ovens ( i.e. , with burner firing rates greater than 22,500 Btu/h). AHAM commented that the utility and performance attributes associated with high-performance cooking products must be recognized and allowed to continue under the safe harbor provisions of NAECA. Due to test procedure complexities and small market share, AHAM recommended that DOE exempt high-performance, commercial-style products. (Public Meeting Transcript, No. 5 at pp. 85-86; AHAM, No. 14 at pp. 2-4) DOE recognizes that the test procedure may not adequately measure performance of commercial-style ovens. The single test block may not adequately measure the temperature distribution that is inherent with the larger cavity volumes and higher firing rates typically found in these products. DOE is not aware of any data upon which to determine the measurement of energy efficiency or energy efficiency characteristics for commercial-style ovens, so therefore will not conduct an analysis on this product class at this time. DOE seeks data and inputs regarding the energy efficiency of commercial-type cooktopsstyle ovens as well as any limitations of the test procedure for this product class. This topic is identified as Issue 6 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. As discussed for electric ovens, AHAM and Whirlpool stated that the “catalytic line” descriptor for the standard gas oven product class is obsolete and should be removed. While DOE is not aware of any gas ovens currently on the market that are catalytically lined, it will retain the current description for completeness. Finally, microwave ovens will constitute a single product class in this rulemaking. DOE did not break down this category of cooking product into further product classes. This product class can encompass microwave ovens with and without browning (thermal) elements, but does not include microwave ovens that incorporate convection systems. DOE is unaware of any data evaluating the efficiency characteristics of microwave ovens incorporating convection systems, so therefore this type of unit will not be included in the analysis. DOE seeks data and inputs on the performance of microwave ovens with convection systems. This topic is identified as Issue 6 under “Issues on Which DOE Seeks Comment” in section IV.E of this ANOPR. AHAM stated during the Framework public meeting that additional product classes for microwave ovens are needed that would likely be a function of volume and wattage, and possibly installation configuration ( i.e. , counter-top versus over-the-range ovens). (Public Meeting Transcript, No. 5 at pp. 86-87) In comments submitted after the Framework public meeting, AHAM reiterated these comments and added that humidity sensors would also need to be considered. However, AHAM conceded that the lack of efficiency data makes it impossible to determine the appropriate product classes at this time. (AHAM, No. 14 at p. 6) Similarly, Whirlpool stated that, without existing energy consumption standards, it does not have any data to formulate appropriate product classes for microwave ovens, and the company commented that obtaining these data would be costly and time consuming. (Whirlpool, No. 10 at p. 6) After the Framework public meeting, AHAM supplied microwave oven efficiency data to DOE that failed to identify any correlation between efficiency and either rated output power or cavity volume. Therefore, DOE has decided not to define product classes as a function of features such as volume or wattage, and instead will retain the single product class of microwave ovens with or without thermal elements. Comments did not strongly support the inclusion of microwave/thermal ovens in the analyses. In addition, several comments used the term “combination ovens” to refer to not only microwave/thermal ovens but also other technologies, such as halogen bulbs. EEI questioned whether DOE would consider combination ovens for future analysis, referring to both microwave plus thermal and microwave plus convection units. (Public Meeting Transcript, No. 5 at p. 139) GE and AHAM both commented that the DOE test procedure is inadequate to measure combination ovens. AHAM further stated that the small market share of combination ovens should preclude them from the analysis. (Public Meeting Transcript, No. 5 at pp. 140-141). In comments submitted after the Framework meeting, EEI stated that, depending on market share, combination ovens could impact baseline energy usage. Although EEI did not suggest including combination ovens in the analyses, it did state that DOE should ensure that any standards do not eliminate these products from the market. (EEI, No. 7 at p. 6) Whirlpool, however, expressed its opinion that combination ovens should not be considered a separate product class due to variations in design and low market share. (Whirlpool, No. 10 at p. 6) DOE recognizes that the microwave oven test procedure can only test the microwave heating function of microwave/thermal ovens, and that it cannot test the browning function of the radiant or halogen elements. However, such browning features are typically a secondary function of a microwave/thermal unit, with the primary cooking being accomplished via microwave heating. In combination units, the convection system performs a significant portion of the cooking process, and, therefore, the inability to measure performance of the convection component would render the test procedure inadequate. DOE has no information that demonstates a difference in energy performance between microwave/thermal ovens operating in microwave mode and microwave ovens. Therefore, DOE will include microwave ovens with thermal browning elements in the single product class. As discussed above, DOE will not conduct an analysis at this time of combination microwave ovens due to a lack of data evaluating energy efficiency or energy efficiency characteristics of microwave ovens incoporating convection systems. DOE received several comments regarding additional product classes for cooking products not specifically covered in the above product classes. For example, EEI questioned whether outdoor natural-gas-fired or propane-fired grills are a covered product for this analysis, and, if so, it recommended that DOE conduct an investigation into shipments and usage patterns. (EEI, No. 7 at p. 5) The test procedures established in 10 CFR Part 430, Subpart B, Appendix I are specified for kitchen ranges and ovens. Further, the test procedures provide for estimating annual operating cost for conventional ranges, conventional cooking tops, conventional ovens, microwave ovens, and microwave/conventional ranges. In response, DOE believes that the specification of “kitchen” and “household cooking appliance” in the definitions of “conventional range” and “conventional cooking top” excludes outdoor gas/propane grills. Therefore, DOE has decided not to include outdoor gas/propane grills in the present analyses. EEI also commented after the Framework public meeting that DOE should include compact cooking products such as toaster ovens in the analysis. (EEI, No. 7 at p. 3) However, the definition of “conventional oven” provided in 10 CFR 430.2 states, in relevant part, “It does not include portable or countertop ovens which use electric resistance heating for the cooking or heating of food and are designed for an electrical supply of approximately 120 volts.” Therefore, DOE is not including toaster ovens in the present analyses because they are not covered products. In sum, in this rulemaking DOE is using the following eight product classes in analyzing and setting standards for cooking products: • Gas cooktops/conventional burners; • Electric cooktop/low or high wattage open (coil) elements; • Electric cooktop/smooth elements; • Gas oven/standard oven with or without a catalytic line; • Gas oven/self-clean oven; • Electric oven/standard oven with or without a catalytic line; • Electric oven/self-clean oven; and • Microwave oven with or without thermal elements. d. Commercial Clothes Washers EPACT 2005 amendments to EPCA placed all CCWs in one product class and applied a single standard for energy efficiency and a single standard for water efficiency for this equipment. (EPACT 2005, section 136(e); 42 U.S.C. 6313(e)) This class encompasses both top-loading (vertical-axis) and front-loading (horizontal-axis) units. During the Framework public meeting and Framework comment period, DOE received comments expressing opposing viewpoints regarding the use of one or two product classes for CCWs. Alliance Laundry Systems (ALS) pressed for two product classes, because ALS believes that in the eyes of consumers, horizontal- and vertical-axis washers can be significantly differentiated in terms of utility and cost. (Public Meeting Transcript, No. 5 at p. 42) However, the Joint Comment argued for a single product class, saying that consumers only want to clean their clothes and, thus, make no distinction between washer product platforms. (Joint Comment, No. 9 at p. 5) The Joint Comment argued that, according to EPCA's definition of classes found at 42 U.S.C. 6219(a), commercial clothes washers should be treated as one class because “the function * * * of commericial clothes washers ( i.e. , cleaning clothes) does not depend on the orientation of the clothes washer drum axis.” (Joint Comment, No. 9 at p. 5) In addition, the Joint Comment contended that DOE chose to maintain one product class during the residential clothes washer rulemaking 12 and, as a result, urged DOE to do the same in this rulemaking. (Joint Comment, No. 9 at p. 5) EEI also supported DOE's designation of a single commercial clothes washer product class. (EEI, No. 7 at p. 3) AHAM “recommends that the Department conduct its analysis using the product categories currently provided for in its regulations.” (AHAM, No. 14 at p. 7) The Multi-Housing Laundry Association (MLA) deferred to its member manufacturers' opinions regarding a single product class. (MLA, No. 8 at p. 2) All manufacturers interviewed by DOE as part of the manufacturer impact analysis opposed the elimination of vertical-axis washers, which could arise as an issue if a single product class is analyzed. (See TSD, Chapter 12.)DOE recognizes that, by analyzing a single product class and applying a single standard for energy efficiency and a single standard for water efficiency to all CCWs, absent the consideration of other relevant factors, the highest economically justified standards could be sufficiently stringent as to possibly cause manufacturers to cease production of vertical-axis washers. 12 DOE notes that the Joint Comment is incorrect. DOE has established five classes of residential clothes washers, including top-loading compact, top-loading standard and front-loading (See 10 CFR part 430, section 430.32(g)). DOE understands how some stakeholders could believe there is only one class of standard-size residential clothes washers in DOE's regulations since the value of the energy efficiency standard is the same for both classes. While the standards are the same, DOE notes they are separate in DOE's regulations found at 430.32(g). The max tech level for the two classes are different, because of the utility features, and are, therefore, separate classes. As noted above, EPCA, as amended by EPACT 2005, applies a single standard for energy efficiency and a single standard for water efficiency to all CCWs. The Congress enacted a single standard for CCWs some years after DOE has established five classes for residential clothes washers, which may suggest that Congress's initial assessment was that a single class would be most reasonable when updating these standards. The statutory provisions do not, however, specifically prevent DOE from exercising its technical expertise to create separate product classes subject to the same standards, if such differentiation is determined to be appropriate. After considering the comments on the Framework Document, DOE decided to keep the single class of commercial clothes washers for today's ANOPR, but remains open to the possibility of changing this approach if further comments demonstrate that such a change is warranted. The Joint Comment, for example, argued that the function of clothes washers is to clean clothes and that all commercial clothes washers perform this function and, therefore, should be treated as a single class. DOE has previously rejected this argument. The residential clothes washer rulemaking history clearly demonstrated that size, the axis of access and certain technologies ( e.g. , suds savings) had consumer utility that affect performance and, therefore, warranted separate classes for residential products. Nevertheless, DOE has decided to maintain a single class for CCWs in today's ANOPR, for the reasons that follow. First, other stakeholders did not provide any compelling information to support proposing multiple product classes for CCWs, Second, even though there may be some performance-related features on existing CCWs that might warrant multiple CCW product classes (as was demonstrated in the residential clothes washer rulemaking), technologies may be available to enable top-loading units to attain the same efficiency level as front-loading units, thereby rendering any product class distinction meaningless. In tentatively deciding to retain a single product class for CCWs, DOE was sensitive to other considerations including the likely outcome of requisite U.S. Department of Justice (DOJ) review of the potential impacts, if any, of efficiency standards on competition, given that a large percentage of the overall market for commercial washers is produced by one manufacturer that specializes in vertical-axis machines. Another consideration may be the potential effect of multiple-class standards on the market shares of vertical-axis and horizontal-axis machines. For example, if separate standards further widened the first cost differences between these two classes of washers, then the overall result might be a decline in the market share of the more energy efficient horizontal-axis machines, which could more than offset any energy savings achieved in vertical-axis machines. DOE notes that sections 325 (o)(4) and 327(d)(4) of EPCA require DOE to consider the availability of performance characteristics, features, and other characteristics in setting standards and in considering State petitions for exemption from Federal preemption. (42 U.S.C. 6295(o)(4) and 6297(d)(4)) The California Energy Commission (CEC) submitted a petition for exemption from Federal preemption by DOE's residential clothes washer standard. 13 One of the factors on which DOE based its denial of the CEC petition was that it would make top-loading clothes washers unavailable in the market. (71 FR 78157) 13 DOE Docket No. EE-RM-PET-100, submitted by the California Energy Commission. Based on the discussion above, DOE requests comments on clothes washer product classes and, if DOE were to keep a single class for commercial clothes washers, how to consider the requirements of section 325(o)(4) of EPCA in considering Trial Standard Levels. DOE specifically seeks feedback on these product classes and invites interested persons to submit written presentations of data, views, and arguments as discussed in section IV.E of this ANOPR. 2. Market Assessment AHAM is the trade association representing the majority of dishwasher, dehumidifier, and cooking product manufacturers. AHAM conducts market and consumer research studies and publishes a biennial Major Appliance Fact Book. AHAM also develops and maintains technical standards for various appliances to provide uniform, repeatable procedures for measuring specific product characteristics and performance features. Other trade associations relevant to this rulemaking include the Coin Laundry Association (CLA), representing the 30,000 coin laundry owners globally, and the MLA, a trade association of operator and supplier companies providing professional laundry services for the multi-housing industry. The majority of the domestic share of CCWs is held by four major manufacturers: ALS, the Maytag Corporation (Maytag), Whirlpool, and GE. Maytag and Whirlpool merged in 2006 but have continued to maintain both product lines to this date. DOE estimates that there are approximately 13 manufacturers of residential dishwashers that serve the domestic market. Approximately 94 percent of the market is served by four manufacturers: AB Electrolux (Frigidaire), GE, Maytag, and Whirlpool. The merger between Whirlpool and Maytag resulted in the combined company accounting for 51 percent of the domestic market. DOE estimates that there are approximately 18 manufacturers of residential dehumidifiers that serve the domestic market. Approximately two thirds of the market is represented by two manufacturers: Whirlpool and LG Electronics (LG). DOE estimates that there are approximately 14 manufacturers of cooking products (including ovens, cooktops, and ranges) that serve the U.S. market. The majority of the cooking products market is represented by four companies: Frigidaire, GE, Maytag, and Whirlpool. GE and Whirlpool represent nearly three quarters of the electric range products market. GE represents over a third of the gas range products market, while the combined Whirlpool and Maytag comprise over a quarter. The microwave oven market differs from the rest of the domestic cooking product market in that many of the manufacturers are foreign-owned companies with manufacturing facilities outside of the United States. Many of the domestic appliance manufacturers rebrand foreign-manufactured microwave products. Major microwave oven manufacturers are: LG, Samsung Electronics America, Inc. (Samsung), and the Sharp Electronics Corporation (Sharp), serving 67 percent of the domestic market. The second tier of approximately 9 manufacturers serves the remaining 33 percent of the domestic market. Due to mergers and acquisitions, the home appliance industry continues to consolidate. While the degree of market share concentration varies by product type, the market shares of a few companies provide evidence in support of this characterization. According to the September 2006 issue of Appliance Magazine , Whirlpool, GE, Frigidaire, and Maytag comprise 92 percent of the U.S. core appliance market share. “Core appliances” include dishwashers, freezers, ranges, refrigerators, and clothes washers. Whirlpool and Maytag were allowed by the U.S. Department of Justice (DOJ) to complete a merger on March 31, 2006, after an investigation that focused primarily on residential laundry but with consideration of impacts across all product lines. Although opponents of the merger had asserted that the combined companies would control as much as 70 percent of the residential laundry market and as much as 50 percent of the residential dishwasher market, 14 DOJ determined that the merger would not give Whirlpool excessive market power in the sale of its products and that any attempt to raise prices would likely be unsuccessful. In support of this claim, DOJ noted: (1) Other U.S. brands, including Sears Brands LLC (Kenmore), GE, and Frigidaire, are well established; (2) foreign manufacturers, including LG and Samsung, are gaining market share; (3) existing U.S. manufacturers are operating below production capacity; (4) the large home appliance retailers have alternatives available to resist price increase attempts; and (5) Whirlpool and Maytag substantiated large cost savings and other efficiencies that would benefit consumers. The Whirlpool-Maytag merger follows several other mergers and acquisitions in the home appliance industry. For example, Maytag acquired Jenn-Air Corporation in 1982, Magic Chef, Inc. in 1986, and Amana Appliances in 2001. Whirlpool acquired the KitchenAid division of Hobart Corporation in 1986. White Consolidated Industries (WCI) acquired the Frigidaire division of General Motors Corporation in 1979, and AB Electrolux acquired WCI (and therefore Frigidaire) in 1986. See Chapter 3 of the TSD for more information regarding manufacturers of CCWs and residential dishwashers, dehumidifiers, and cooking products. 14 P. Hussmann, “Justice to Extend Maytag-Whirlpool Merger Review,” Newton Daily News Online (Feb. 14, 2006). In addition, DOE considers the possibility of small businesses being impacted by the promulgation of energy conservation standards for CCWs and residential dishwashers, dehumidifiers, and cooking products. At this time, DOE is not aware of any small manufacturers, defined by the Small Business Administration as having 750 employees or fewer, who produce products that fall under this rulemaking and who, therefore, would be impacted by a minimum efficiency standard. Should any small business manufacturers of the four appliance products be identified, DOE will study the potential impacts on these small businesses in greater detail during the MIA, which it will conduct as a part of the NOPR analysis. See Chapter 3 of the TSD for more information regarding small business manufacturers of CCWs and residential dishwashers, dehumidifiers, and cooking products. Next, DOE identified distribution channels for each of the products covered by this rulemaking. For CCWs, DOE determined that the market consists of laundromats, private multi-family housing, and large institutions ( e.g. , military barracks, universities, and housing authorities). Most large institutions and a majority of private multi-family housing (between 50 and 90 percent) do not purchase clothes washers directly. Rather, these organizations lease their laundry space to a third party known as a route operator. Route operators supply laundry equipment and maintain facilities in exchange for a percentage of the laundry revenue. Laundromats and some private building managers purchase or lease clothes washers directly from distributors. The main difference between route operators and distributors is the length of service provided to their clients. Route operators provide ongoing support while distributor support ends at the point of sale. The distribution chain for residential appliances, including dishwashers, dehumidifiers, and cooking products, differs from commercial products, since the majority of consumers purchase their appliances directly from retailers. These retailers include: (1) Home improvement, appliance, and department stores; (2) Internet retailers; (3) membership warehouse clubs; and (4) kitchen remodelers. DOE determined that over 93 percent of residential appliances are distributed from the manufacturer directly to a retailer. See Chapter 3 of the TSD for more information regarding distribution channels for CCWs and residential dishwashers, dehumidifiers, and cooking products. DOE considers regulatory and non-regulatory initiatives that affect CCWs and residential dishwashers, dehumidifiers, and cooking products. NAECA established Federal standards for residential dishwashers, which were subsequently amended by DOE by a final rule published in the Federal Register on May 14, 1994. (56 FR 22250) NAECA established prescriptive standards for gas cooking products, requiring gas ranges and ovens with an electrical supply cord not to be equipped with constant burning pilots, and directed DOE to conduct two cycles of rulemakings to determine if more stringent standards are justified. (42 U.S.C. 6295 (h)(1)-(2)) DOE issued a NOPR on March 4, 1994, proposing performance standards for gas and electric residential cooking products, including microwave ovens. 59 FR 10464. In accordance with its 1996 Process Rule, DOE refined its standards analysis of cooking products. With regard to gas cooking products, DOE focused on the economic justification for eliminating standing pilot lights. Partially due to the difficulty of conclusively demonstrating that elimination of standing pilot lights was economically justified, DOE issued a final rule on September 8, 1998, that covered only electric cooking products, including microwave ovens. 63 FR 48038. The final rule found that standards were not economically justified for electric cooking products. DOE never completed its standards rulemaking for gas cooking products. Section 136(e) of EPACT 20005 amends section 342 of EPCA, 42 U.S.C. 6313, to add subsection (e) for CCWs. Likewise, section 135(c)(4) of EPACT 2005 amends section 325 of EPCA, 42 U.S.C. 6295, to add subsection (cc) for dehumidifiers. New subsection 342(e), 42 U.S.C. 6313(e) establishes energy conservation standards for CCWs. Further, it requires that DOE issue a final rule by January 1, 2010, to determine whether the standards for CCWs should be amended. New subsection 325(cc), 42 U.S.C. 6295(cc), establishes energy conservation standards for dehumidifiers based on a unit's capacity to extract moisture from the surrounding air (in pints/day). These Federally mandated standards for dehumidifiers will be the national standards when they take effect on October 1, 2007. In addition, EPACT 2005 requires that by October 1, 2009, DOE issue a final rule for dehumidifiers to determine whether the standards should be amended. (EPACT 2005, section 135(c)(4)) Further, in the event that DOE fails to publish a final rule requiring new standards to take effect by October 1, 2012, EPACT 2005 also prescribes a new set of amended standards for dehumidifiers. ( Id. ) Prior to the passage of EPACT 2005, the following States proposed and adopted State-level efficiency regulations for CCWs that are identical, or very similar, to EPACT 2005 regulations: Arizona, California, Connecticut, Maryland, New Jersey, Oregon, Rhode Island, and Washington. The EPACT 2005 energy and water use standards for CCWs preempt any State efficiency standards since they became effective January 1, 2007. 15 In addition to the efficiency standards discussed above, the State of California requires that commercial top-loading, semi-automatic clothes washers and commercial suds-saving clothes washers manufactured on or after January 1, 2005 have an unheated rinse water option. 15 None of these States submitted a petition for waiver to DOE, seeking to maintain their existing efficiency standards for commercial clothes washers. DOE reviewed several voluntary programs that promote energy-efficient CCWs, residential dishwashers, dehumidifiers, and cooking products in the United States. Many programs, including the Consortium for Energy Efficiency (CEE), Energy Star, and the Federal Energy Management Program (FEMP), establish voluntary energy conservation standards for these products. CEE issues voluntary specifications for CCWs and standard-sized dishwashers under its Commercial, Family-Sized Washer Initiative and Super-Efficient Home Appliance Initiative, respectively. Energy Star, a voluntary labeling program backed by the EPA and DOE, identifies energy efficient products through a qualification process. To qualify, a product must exceed Federal minimum standards by a specified amount, or if no Federal standard exists, exhibit selected energy-saving features. The Energy Star program works to recognize the top quartile of products on the market, meaning that approximately 25 percent of products on the market meet or exceed the Energy Star levels. Energy Star specifications exist for many products, including CCWs, dishwashers, and dehumidifiers. FEMP works to reduce the cost and environmental impact of the Federal government by advancing energy efficiency and water conservation, promoting the use of distributed and renewable energy, and improving utility management decisions at Federal sites. FEMP helps Federal buyers identify and purchase energy efficient equipment, including CCWs, residential dishwashers, and microwave ovens. See Chapter 3 of the TSD for more information regarding regulatory and non-regulatory initiatives. During the engineering analysis (Chapter 5 of the TSD), efficiency levels specified by many of these initiatives will be analyzed during the generation of cost-efficiency curves. DOE reviewed data collected by the U.S. Census Bureau, EPA, and AHAM to evaluate annual residential appliance product shipment trends and the value of these shipments. As the number of new home starts and the percentage of consumers with multiple units of some appliances increases annually, the unit shipments of most appliances are expected to increase as well. The shipments of built-in dishwashers increased by over 76 percent from 1995 to 2005, while the shipments of portable dishwashers declined 35 percent in the same time period. After a period of decline from 1995 to 2002, shipments of dehumidifiers increased sharply in 2003 and have continued to rise through 2005. Shipments of dehumidifiers nearly doubled between 1995 and 2005. From 1995 to 2005, shipments of electric and gas free-standing ranges and surface cooking units, electric built-in ranges, and microwave ovens increased, while shipments of built-in gas ranges decreased. However, in real dollars, the value of shipments for the household appliance industry has declined by nearly 14 percent over the period from 1994 to 2005. The historical shipments data shown in Tables II.1, II.2, and II.3 and the historical market saturation data shown in Table II.4 provide a better picture of the market for the four appliance products. The market saturation data indicate the percentage of the housing stock with the appliance. The data in Table II.4 also include for each of the given years the number of appliances in the housing stock. Because commercial clothes washers are not a household appliance, market saturation data are not provided. The historical shipments and market saturation data for dishwashers, dehumidifiers, and cooking products are from the 2005 AHAM Fact Books , 16 while the commercial clothes washer historical shipments data are based on data provided to DOE by AHAM for the years 2002-2005 and Appliance Magazine for the years 1988-1998. 17 16 AHAM, 2005 Fact Book , 2005. Washington, DC. Available for purchase at: http://www.aham.org/ht/d/Store/name/FACTBOOK . 17 ‘Statistical Review’. Appliance Magazine , April, 1998, 1999. Table II.1.—Industry Shipments of Dishwashers and Dehumidifiers [Domestic and import in thousands of units] Year Dishwashers Built-In Portable Total Dehumidifiers 2005 7,294 133 7,428 1,957 2004 6,953 153 7,106 1,672 2003 6,280 148 6,428 1,311 2002 6,049 158 6,207 799 2001 5,478 149 5,627 806 2000 5,663 164 5,827 975 1999 5,542 170 5,712 950 1998 4,969 175 5,144 1,031 1997 4,653 173 4,826 820 1996 4,417 189 4,606 977 1995 4,141 205 4,346 1,003 Table II.2.—Industry Shipments of Cooking Products [Domestic and import in thousands of units] Year Cooking products Electric ranges Free-standing Built-In Surface cooking units Total Gas ranges Free-standing Built-In Surface cooking units Total Microwave ovens 2005 4,685 973 542 6,201 3,139 64 560 3,762 13,862 2004 4,612 963 570 6,145 3,124 67 528 3,719 15,526 2003 4,238 841 543 5,622 2,897 67 455 3,419 14,274 2002 4,030 780 528 5,338 2,781 71 416 3,268 13,311 2001 3,842 726 498 5,066 2,580 72 384 3,036 13,446 2000 3,826 706 494 5,026 2,729 70 377 3,176 12,644 1999 3,785 705 493 4,983 2,698 72 367 3,137 11,422 1998 3,481 652 506 4,639 2,543 71 336 2,950 10,365 1997 3,177 617 446 4,240 2,391 73 280 2,744 8,883 1996 3,123 614 418 4,155 2,366 72 272 2,710 8,771 1995 2,931 598 389 3,917 2,391 84 240 2,715 8,162 Table II.3.—Industry Shipments of Commercial Clothes Washers [Thousands of units] Year Units 2005 177 2004 178 2003 191 2002 175 2001 194 2000 215 1999 239 1998 265 1997 241 1996 232 1995 209 1994 205 1993 190 1992 188 1991 193 1990 225 1989 215 1988 213 Table II.4.—Appliance Market Saturations: Number of Households With Product (in Millions) and Percentage of U.S. Households With Product Product 1970 Number Percent 1982 Number Percent 1990 Number Percent 2001 Number Percent 2005 Number Percent Dishwashers 12 18.9 37.2 44.5 50.3 53.9 61.8 59.3 80.2 73.7 Dehumidifiers NA NA 9.2 11 15.6 16.7 14.7 14.1 20.6 18.9 Electric Ranges/Cooktops* 25.8 40.6 48.4 58 58.4 62.6 69.2 66.3 71 65.3 Gas Ranges/Cooktops* 36.6 57.7 35.7 42.7 36.1 38.7 39.4 37.8 42.2 39 Microwave Ovens Neg. Neg. 21.4 25.6 77.2 82.7 94.6 ** 90.7 97.2 89.3 * Cooktops not included in 1970 or 1982 data. ** Includes over-the-range and countertop microwave ovens. During the Framework public meeting, DOE solicited comments regarding existing databases to track CCW efficiencies. ALS commented that the existing CEC database contains useful data and should be reviewed. (Public Meeting Transcript, No. 5 at p. 44) As of March 2007, the CEC database had 626 entries for dishwashers and 196 entries for CCWs. This database, however, does not specify which models are current, and it does not appear to cover the entire range of dishwasher models. DOE also consulted the Energy Star database for residential clothes washers, dishwashers, and dehumidifiers. DOE subsequently used these data to identify units for reverse engineering tear-downs and other analysis. Whenever possible, DOE investigated the design options of the listed appliances, which then helped DOE design the interview guides for the MIA interviews with stakeholders to solicit comments about design options. DOE used the data for residential clothes washers as an additional means of validation for the CCW analysis. Natural Resources Canada (NRCan) publishes a database of electric cooking appliance performance. Although it is not completely representative of the current U.S. cooking products market, this database covers products available in the Canadian market, which overlaps with the U.S. market. Chapter 3 of the TSD presents data that detail the energy factors of standard and self-cleaning electric ranges and ovens, along with coil-element and smooth element electric cooktops. DOE also evaluated import and export trends for CCWs and residential dishwashers, dehumidifiers, and cooking products as reported by the U.S. Census Bureau and AHAM, as well as the market saturation for dishwashers, dehumidifiers, and cooking products according to AHAM. On the whole, major appliance unit imports increased 1.8 percent in 2005 from 2004. Major appliance unit exports increased 13.5 percent over the same period. In terms of market saturation, while the percentage of U.S. households with electric ranges and/or cooktops and microwave ovens has decreased slightly since 2001, the market saturation of dishwashers, dehumidifiers, and gas cooking products has increased. See Chapter 3 of the TSD for more information regarding historical shipments and market saturation. From AHAM data 18 18 and the U.S. Department of Labor's Consumer Price Index, DOE estimated average retail prices for residential appliances, including clothes washers, dishwashers, dehumidifiers, and cooking products. Although prices for electric and gas ranges have increased in the period from 1980 to 2005, the increase has been at a much slower rate than the annual rate of inflation. Prices of residential dishwashers, dehumidifiers, microwave ovens, and clothes washers have decreased in the same time period. DOE also developed the household appliance industry cost structure from publicly available information from the U.S. Census Bureau, the Annual Survey of Manufacturers (ASM), and the SEC 10-K reports filed by publicly-owned manufacturers. The statistics illustrate a steady decline in the number of production and non-production workers in the industry. 18 Data submitted to DOE as part of this rulemaking, contained in DOE Docket No. EE-2006-STD-0127. Inventory levels, expressed both in dollars and as a percentage of value of shipments, have steadily declined since 1995 for the household appliance industry, according to the ASM. DOE obtained full-production-capacity utilization rates from the U.S. Census Bureau, Survey of Plant Capacity from 1994 to 2004. Full production capacity is defined as the maximum level of production an establishment could attain under normal operating conditions. In the Survey of Plant Capacity report, the full production utilization rate is a ratio of the actual level of operations to the full production level. The full-production-capacity utilization rate for household appliances in aggregate, along with the rates for cooking appliances and household laundry appliances, show a decrease in utilization from 1994 to 2004, although trends in subsets of that time period have fluctuated. See Chapter 3 of the TSD for more information regarding retail pricing, industry cost structure, inventory levels, and production capacity utilization. 3. Technology Assessment In the technology assessment, DOE identifies technologies and design options that appear to be feasible means of improving product efficiency, and characterizes energy efficiency of residential dishwashers, dehumidifiers, and cooking products, and CCWs currently available in the marketplace. This assessment provides the technical background and structure on which DOE bases its screening and engineering analyses. a. Dishwashers DOE identified technologies to increase the energy efficiency of residential dishwashers primarily from a review of the following three sources: (1) DOE's ANOPR initiating a standards rulemaking for dishwashers, published on November 14, 1994 (59 FR 56423); (2) recent information provided by trade publications; and (3) design data identified in manufacturer product offerings. Except where otherwise noted, design options are taken from the 1994 ANOPR. DOE derived the variable washing pressure and variable-speed drive technologies from the February 2006 edition of Appliance Magazine. DOE grouped these technologies together because they collectively address manufacturers' design tradeoffs between the mechanical soil removal function of the water and the cycle time and energy associated with the dishwasher pump. Condenser and fan/jet drying are technologies listed in one manufacturer's product offerings. DOE also identified supercritical carbon dioxide washing from the November 2005 issue of Appliance Magazine. It added low-standby-loss electronic controls based on DOE's analysis of controller standby power in dishwashers currently on the market. In addition to these design options, the multiple water organizations commented that DOE should consider a two-drawer design or similar option which would improve efficiency under partial loads. The multiple water organizations also belie [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3AE7-22040. Public record. Not legal advice.