[Federal Register Volume 74, Number 48 (Friday, March 13, 2009)]
[Rules and Regulations]
[Pages 10830-10836]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-5459]


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DEPARTMENT OF ENERGY

10 CFR Part 436

RIN 1904-AB68


Federal Procurement of Energy Efficient Products

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

ACTION: Final rule.

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SUMMARY: The U.S. Department of Energy (DOE) today publishes a final 
rule to promote Federal procurement of energy-efficient products. The 
final rule establishes guidelines for Federal agencies regarding the 
implementation of amendments to the National Energy Conservation Policy 
Act (NECPA) that require Federal agencies to procure ENERGY STAR 
qualified and Federal Energy Management Program (FEMP) designated 
products in procurements involving energy consuming products and 
systems. Today's final rule includes changes in response to comments 
received on the notice of proposed rulemaking published June 19, 2007. 
Most notably, today's final rule does not establish a reporting 
requirement, as initially proposed, for federal agencies under 
procurement requirement of NECPA.

DATES: This rule is effective April 13, 2009.

FOR FURTHER INFORMATION CONTACT: For technical issues contact Mr. Cyrus 
Nasseri, U.S. Department of Energy, Office of Energy Efficiency and 
Renewable Energy, Federal Energy Management Program, EE-2L, 1000 
Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-9138, e-
mail: cyrus.nasseri@ee.doe.gov. For legal issues contact Mr. Chris 
Calamita, U.S. Department of Energy, Office of the General Counsel, 
Forrestal Building, GC-72, 1000 Independence Avenue, SW., Washington, 
DC 20585, (202) 586-9507, e-mail: Christopher.Calamita@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background
    A. The Energy Policy Act of 2005
    B. ENERGY STAR Qualified and FEMP Designated Products
    C. Proposed Rule
    D. Draft Guidance
II. Discussion of Comments and the Final Rule
    A. Definition of ``Covered Product''
    B. Reporting Agency Exceptions to the Procurement Requirement
    C. Compliance With Section 553
    D. Definition of Criteria for ENERGY STAR Qualification or FEMP 
Designation
    E. Supply Source for Excepted Procurement
III. DOE Guidance
    A. Procurements
    B. Procurement Planning
    C. Exceptions
IV. Regulatory Review
    A. National Environmental Policy Act
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Unfunded Mandates Reform Act of 1995
    E. Treasury and General Government Appropriations Act, 1999
    F. Treasury and General Government Appropriations Act, 2001
    G. Executive Order 12866
    H. Executive Order 12988
    I. Executive Order 13132
    J. Executive Order 13211
V. Congressional Notification
VI. Approval of the Office of the Secretary

I. Introduction and Background

A. The Energy Policy Act of 2005

    The Energy Policy Act of 2005 (EPACT 2005) (Pub. L. 109-58; August 
8, 2005), amended Part 3 of title V of NECPA (42 U.S.C. 8251-8259) by 
adding section 553. Section 553 of NECPA requires each Federal agency 
to procure ENERGY STAR qualified or FEMP designated products, unless 
the head of the agency determines in writing that a statutory exception 
applies. (42 U.S.C. 8259b(b)) Section 553 of NECPA was further amended 
by section 525 of the Energy Independence and Security Act of 2007 
(Pub. L. 140-110; December 19, 2007) to clarify that the procurement 
requirement applies to the procurement of a product in a category 
covered by the Energy Star program or the FEMP program for designated 
products. (42 U.S.C. 8259b(b)(1)) Further, each Federal agency is 
required to incorporate into the specifications of all procurements 
involving energy consuming products and systems, and into the factors 
for evaluation of offers received for such procurements, criteria for 
energy efficiency that are consistent with the criteria used for rating 
ENERGY STAR qualified products and for rating FEMP designated products. 
(42 U.S.C. 8259b(b)(3))
    Section 553 also requires that all inventories or listings of 
products operated and maintained by the General Services Administration 
(GSA) and the Defense Logistics Agency (DLA) clearly identify and 
prominently display ENERGY STAR qualified and FEMP designated products 
in any listing or inventory of products, and it requires GSA and DLA to 
supply only ENERGY STAR qualified and FEMP designated products in all 
covered product categories, except in cases in which the head of the 
agency ordering a product specifies in writing that an exception 
applies. (42 U.S.C. 8259b(c))
    Section 553 of NECPA contains two exceptions to the requirement to 
procure only ENERGY STAR qualified and FEMP designated products, and it 
excludes a specific category of energy consuming products from 
coverage.
    A procurement may be excepted if the head of an agency finds in 
writing that either: (1) An ENERGY STAR qualified product or FEMP 
designated product is not cost-effective over the life of the product 
taking energy cost savings into account; or (2) no ENERGY STAR 
qualified product or FEMP designated product is reasonably available 
that meets the functional requirements of the agency. (42 U.S.C. 
8259b(b)(2)) In addition, section 553 excludes from the definition of 
products subject to these requirements any energy consuming product or 
system designed or procured for combat or combat-related missions. (42 
U.S.C. 8259b(a)(5))
    The subsection entitled ``REGULATIONS,'' section 553(f) of NECPA, 
directs the Secretary of Energy to issue guidelines to carry out the 
statute. (42 U.S.C. 8259b(f)) NECPA section 553 imposes procurement 
requirements on agencies and additional requirements on GSA and DLA. 
DOE does not need to issue regulations to implement those statutory 
requirements. Moreover, DOE does not have the authority to change by 
regulation the statutory procurement requirements that are applicable 
to agencies or the additional requirements that govern GSA and DLA.
    Consistent with the direction provided in section 553(f), today's 
final rule amends 10 CFR part 436, Federal Energy Management and 
Planning Programs, to establish guidelines for Federal agencies on 
compliance with section 553.

[[Page 10831]]

B. ENERGY STAR Qualified and FEMP Designated Products

    In 1992, the United States Environmental Protection Agency (EPA) 
introduced ENERGY STAR as a voluntary labeling program designed to 
identify and promote energy efficient products, in part, to reduce 
greenhouse gas emissions.
    In response to Executive Order 12902, ``Energy Efficiency and Water 
Conservation at Federal Facilities,'' (59 FR 11463; March 8, 1994) 
twenty-two federal agencies signed an agreement in 1994 to shift their 
purchasing of energy-using products to the best 25% of models on the 
market. Products that were labeled with the ENERGY STAR logo met this 
requirement. The Department of Energy's Federal Energy Management 
Program (FEMP) provided additional guidance to Federal agencies to 
identify efficient products not covered by the ENERGY STAR program, 
i.e., FEMP designated products.
    In 1999, the partnership between EPA and DOE was furthered by 
Executive Order 13123, ``Greening the Government Through Efficient 
Energy Management,'' which directed EPA and DOE to expedite the process 
of designating products as ENERGY STAR qualified and to merge their 
efficiency rating procedures. 64 FR 30851; June 8, 1999. Executive 
Order 13123 was replaced with Executive Order 13423, ``Strengthening 
Federal Environmental, Energy, and Transportation Management,'' which 
requires, among other things, that in acquisitions of goods and 
services Federal agencies use sustainable environmental practices, 
including acquisition of bio-based, environmentally preferable, energy-
efficient, water-efficient, and recycled-content products. 72 FR 3919; 
January 26, 2007.
    In EPACT 2005, Congress established statutory parameters for the 
ENERGY STAR program. (42 U.S.C. 6294a) The statute prescribes the 
program duties of the Administrator of EPA and the Secretary of Energy; 
requires the solicitation of public comment before an ENERGY STAR 
product category, specification or criterion is established or revised; 
and establishes a lead time before a new or significant revision of a 
product category, specification, or criterion may become effective.
    EPACT 2005 also reaffirmed the authority of the Federal Energy 
Management Program to identify a product as being ``among the highest 
25 percent of equivalent products for energy efficiency.'' (42 U.S.C. 
8259b(a)(4))
    Currently, ENERGY STAR qualified and FEMP designated products cover 
62 types of products in the following categories: (1) Lighting; (2) 
commercial and industrial equipment; (3) food service equipment; (4) 
office equipment; (5) home electronics; (6) appliances; (7) residential 
equipment; (8) plumbing; and (9) construction products. ENERGY STAR 
qualified and FEMP designated products have been determined to be life-
cycle cost-effective in normal usage. However, purchasers are 
encouraged to evaluate products according to their specific 
applications and circumstances. Life-cycle cost calculators for many of 
the ENERGY STAR qualified and FEMP designated products can be accessed 
at:http://www.eere.energy.gov/femp/procurement/eep_eccalculators.html.

C. Proposed Rule

    As discussed above, NECPA section 553(f), entitled ``REGULATIONS,'' 
directs DOE to issue guidelines to carry out the section. (42 U.S.C. 
8259b(e)) On June 19, 2007, DOE published a notice of proposed 
rulemaking that proposed a reporting requirement to track agency 
compliance with the procurement requirements established in section 553 
of NECPA. 72 FR 33696; June 19, 2007. DOE also published draft guidance 
to assist Federal agencies in complying with the procurement 
requirements established in section 553.
    NECPA section 553 applies to the procurement of energy consuming 
products. Section 553 defines ``product'' as excluding energy consuming 
products or systems designed or procured for combat or combat-related 
missions. (42 U.S.C. 8259b(a)(5)) For the purpose of the reporting 
requirement, the proposed rule relied on the term ``covered product,'' 
i.e., a product or system that is in a category covered by the ENERGY 
STAR or FEMP program. Covered products are those energy consuming 
products that the ENERGY STAR or FEMP programs determined to hold the 
greatest promise for energy savings. Within these product categories, 
there is typically a broad range of life-cycle costs associated with 
the products. ENERGY STAR and FEMP identify those products with lower 
life-cycle costs for federal buyers. Both programs will continue to 
review market trends and product availability, and may determine that 
additional products should be added to the list of covered products.
    Section 553(a)(1) specifies a definition of agency that includes an 
agency under any branch of the Government (including a congressional 
agency). (42 U.S.C. 8259b(a)(1)) The proposed rule defined ``agency'' 
consistent with the definition contained in Title 5 of the United 
States Code, which essentially limits the term ``agency'' to those 
under the Executive Branch. (5 U.S.C. 551(1)) DOE initially determined 
that the inclusion of non-Executive Branch agencies under the 
definition in section 553(a)(1) of NECPA was inappropriate for a 
regulation promulgated by DOE given DOE's authority. 72 FR 33697. 
Moreover, the definition of ``agency'' in 5 U.S.C. 551(1) is 
incorporated by reference into subchapter III, Federal Energy 
Initiative, of Chapter 91 of Title 42 of the United States Code, which 
includes section 553. DOE noted that the other branches of the 
Government may, at their discretion, rely on DOE's regulation and 
guidance in implementing section 553.
    As stated above, section 553 of NECPA contains two exceptions to 
the requirement to procure only ENERGY STAR qualified and FEMP 
designated products. In order to track exceptions, DOE proposed 
reporting requirements to track the exception findings made by agency 
heads. DOE initially determined that information regarding the 
procurement of products for which an exception was necessary would help 
DOE and EPA determine if there is a need for revisions to ENERGY STAR 
qualified or FEMP designated products. DOE has determined that existing 
reporting and tracking mechanisms provide an adequate means to collect 
and analyze information regarding agency procurement of these products.

D. Draft Guidance

    In the preamble to the proposed rule, DOE provided draft guidance 
on compliance with the procurement requirements set forth in section 
553 of NECPA. As discussed previously in this document, section 553(b) 
requires that when agencies procure energy consuming products, either 
directly or through part of a larger contract (e.g., construction, 
renovation, and service or maintenance contracts) that they procure 
either an ENERGY STAR qualified product or a FEMP designated product. 
(42 U.S.C. 8259b(b)(1)) Section 553(c) requires GSA and DLA to clearly 
identify and prominently display ENERGY STAR qualified and FEMP 
designated products in any inventory or listing of products by these 
agencies and that they supply only ENERGY STAR qualified and FEMP 
designated products when appropriate. (42 U.S.C. 8259b(c))
    DOE encourages agencies other than GSA and DLA that operate 
procurement ordering systems to achieve the goals of section 553.

[[Page 10832]]

    Comments were received on the draft guidance provided in the notice 
of proposed rulemaking. The discussion below responds to those comments 
and provides guidance for Federal agencies in complying with section 
553.

II. Discussion of Comments and the Final Rule

    Today's final rule contains a number of changes from the proposed 
rule. Most significantly, the final rule does not include a reporting 
requirement. The changes are discussed below.
    DOE received thirteen comments in response to the notice of 
proposed rulemaking. The comments covered the following topics: 
Definition of products covered under the rule--specifically, whether a 
product must itself be ``energy consuming'' to be considered a 
``covered product''; reporting of exceptions granted by each agency; 
responsibilities of agencies to define procedures to comply with NECPA 
section 553 requirements; and criteria determining whether a product 
meets the requirement of ``Energy Star-qualified or FEMP-designated.'' 
DOE received several comments in support of the proposed rule.

A. Definition of ``Covered Product''

    Several commenters raised issues concerning the definition of 
covered product. (See comments from Single Ply Roofing Industry, Duro-
Last Roofing, Information Technology Industry Council, Chemical Fabrics 
& Film Association, Inc., Sika Sarnafil, Inc.) Commenters suggested 
that the definition of ``covered product'' be expanded to include all 
products for which an ENERGY STAR qualification or a FEMP designation 
is established.
    Discussion of the term ``product'' in the preamble of the notice of 
proposed rulemaking was in the context of ``energy consuming'' 
products. 72 FR 33697; June 19, 2007. However, in the proposed 
regulatory text, ``covered product'' was defined more broadly as ``a 
product that is of a category for which an ENERGY STAR qualification or 
FEMP designation is established.'' The ENERGY STAR categories cover 
products that do not consume energy, such as windows and roofing 
materials.
    DOE is maintaining the definition of ``covered product'' as in the 
proposed regulatory text. The definition of ``covered product'' for the 
purpose of the regulation includes any product that is of a category 
for which an ENERGY STAR qualification or FEMP designation is 
established. However, the statutory procurement requirements apply only 
to the procurement of products as set forth in section 553 of NECPA. 
(42 U.S.C. 8259b) As noted above, section 553 of NECPA, as recently 
amended, specifies that the requirement applies to the procurement of 
an energy consuming product in a product category covered by the Energy 
Star Program or the FEMP program for designating products. (42 U.S.C. 
8259b(b)(1)) The definition of ``covered product'' established in 
today's final rule clarifies that the requirements under section 553 of 
NECPA apply only with regard to energy consuming products that are of a 
product category covered by the Energy Star Program or the FEMP program 
for designating products.
    The Information Technology Industry Council stated that it was 
unclear what the term ``category'' meant in the definition of covered 
product. The ENERGY STAR and FEMP programs apply to specified types of 
products, i.e., categories. A listing of the product categories covered 
by the ENERGY STAR program can be found at http://www.energystar.gov/
index.cfm?fuseaction=find_a_product.
    Currently, there is no companion list of FEMP designated products, 
but the FEMP specifications for energy efficiency products are located 
at http://www.eere.energy.gov/femp/procurement/eep_requirements.html.

B. Reporting Agency Exceptions to the Procurement Requirement

    Several comments were received regarding the perceived burdens of 
requiring agencies to report information regarding the finding of an 
exception under section 553(b)(2) of NECPA. (See comments from Office 
of Federal Environmental Executive; Department of Justice; Department 
of Commerce). These commenters indicated that the reporting requirement 
included in the notice of proposed rulemaking would be unduly 
burdensome on agencies.
    DOE recognizes that there are several existing reporting 
requirements through which DOE can obtain information on exceptions 
found under section 533 of NECPA, without the need to establish a 
separate reporting requirement through regulation. Specifically, 
Federal agencies are currently required to provide information for 
DOE's annual report on energy use and the Office of Federal Procurement 
Policy's annual report on green purchasing requirements. DOE will 
coordinate with the Office of Management and Budget to incorporate 
information regarding the finding of exemptions under section 533 of 
NECPA as part of the data collected for the these annual reports. By 
relying on existing reporting schemes, DOE avoids any potential 
redundancy in reporting requirements for Federal agencies. Therefore, 
DOE is not establishing a reporting requirement in today's final rule.

C. Compliance With Section 553

    Several comments were received regarding agency compliance with the 
procurement requirements in section 553 of NECPA. Specifically, some of 
these comments requested that DOE establish regulations:

--Establishing requirements for GSA and DLA to identify energy-
efficient products (comment from Alliance to Save Energy);
--Specifying how agencies are to determine the cost-effectiveness of 
products for the purpose of an exception finding (comments from Office 
of Federal Environmental Executive; Information Technologies Industry 
Council; and Department of Veterans Affairs); and
--Providing additional exceptions that may be available to Federal 
agencies (comments from Office of Federal Environmental Executive and 
Department of Veterans Affairs).

As stated above, DOE has determined that the procurement requirements 
and the product listing requirements of section 553 of NECPA are self-
executing. However, today's final rule codifies the guidance provided 
in the preamble of the notice of proposed rulemaking and this document. 
Placing the guidance in the Code of Federal Regulations, agencies 
should be able to more readily access the guidance.
    With regard to a finding under the exception provision in section 
553(b)(2), each agency should develop a process for evaluating its 
individual product needs. In the guidance section below, DOE does 
provide guidance on how an agency may evaluate the cost-effectiveness 
of a product.
    The exception provision in section 553 provides specific criteria 
for determining when such an exception finding can be made. Section 553 
does not include provisions granting exceptions beyond those enumerated 
in that section. While section 553 specifies that a finding of an 
exception is to be made by the head of an agency, agencies may 
consider, as appropriate, the delegation of the exception authority to 
other officials within the agency.

D. Definition of Criteria for ENERGY STAR Qualification or FEMP 
Designation

    One comment (comment from Arkansas Lamp Manufacturing) dealt with 
the mechanism by which the ENERGY STAR program determines the

[[Page 10833]]

criteria by which ENERGY STAR qualified products are identified. This 
process is beyond the scope of this regulation. Moreover, as noted 
above, EPACT 2005 established statutory parameters for the ENERGY STAR 
program. (42 U.S.C. 6294a)
    Another comment (comment from Information Technology Industry 
Council) dealt with the distinction between a product meeting the 
functional requirements contained in the technical specifications for 
ENERGY STAR products and a product that is ENERGY STAR qualified. The 
language of section 553 of NECPA requires federal agencies to procure 
an ENERGY STAR qualified product; i.e., a product manufactured by a 
full participant in the ENERGY STAR program. (42 U.S.C. 8259b(1)(A)) A 
product must be ENERGY STAR qualified to meet the procurement 
requirements; functional performance alone is not sufficient.

E. Supply Source for Excepted Procurement

    One comment (comment from Alliance to Save Energy) requested that 
DOE require the federal supply sources (GSA and DLA) to verify that 
customers had prepared a written exception before supplying a covered 
product that is not ENERGY STAR qualified or FEMP designated. As 
discussed above, DOE does not have the authority to change by 
regulation the statutory requirements that govern GSA and DLA.

III. DOE Guidance

    Section 533(e) of NECPA, titled ``Regulations'', directs DOE to 
issue guidelines to carry out the procurement requirements of that 
section. As indicated previously in this document, DOE is codifying, to 
the extent practical, the guidance provided in the preamble of the 
notice of proposed rulemaking and this document. As noted, the guidance 
provided in the Code of Federal Regulations, should be more readily 
accessible to agencies, as opposed to guidance provided only in the 
Federal Register.

A. Procurements

    Requirements for Federal procurement are governed, in part, by the 
Federal Acquisition Regulation (FAR). (48 CFR part 1 et seq.). On 
November 23, 2007, the FAR requirements were revised to reflect the 
requirements in section 553 of NECPA. 72 FR 65868; Nov. 23, 2007. DOE 
has worked closely with members of the FAR Council to ensure a 
consistency between today's final rule and the recent FAR revision.
    Federal agencies are generally required to procure an ENERGY STAR 
qualified or FEMP designated product whenever procuring a covered 
product. Additionally, products furnished by contractors while 
performing at a federally controlled facility should be qualified 
products regardless of whether the government receives title at the end 
of contract performance.
    A list of product categories, which contain ENERGY STAR qualified 
and FEMP designed products, is located at http://www.eere.energy.gov/
femp/pdfs/eep_productfactsheet.pdf.
    To identify actual products that are ENERGY STAR rated, potential 
purchasers can go to http://www.energystar.gov/products.
    Currently, there is no companion list of FEMP designated products, 
but the FEMP specifications for energy efficiency products are located 
at http://www.eere.energy.gov/femp/procurement/eep_requirements.html.

B. Procurement Planning

    In addition to establishing requirements for the actual procurement 
of certain products, section 553(b)(3) directs heads of agencies to 
incorporate into the specifications for all procurements involving 
covered products criteria for energy efficiency that are consistent 
with the criteria used to rate ENERGY STAR products and FEMP designated 
products. (42 U.S.C. 8259b(b)(3)) This requirement applies to general 
specifications, project specifications, and construction, renovation 
and service contracts that involve the procurement of covered products. 
Agencies should consider this requirement to apply to:
     Design, design/build, renovation, retrofit and services 
contracts; facility maintenance and operations contracts; as well as 
energy savings performance contracts and utility energy service 
contracts.
     If applicable, lease agreements for buildings or 
equipment, including build-to-lease contracts, such as those used to 
implement the Military Housing Privatization Initiative.
    Further, agencies should require the procurement of ENERGY STAR and 
FEMP designated products in new service contracts and other existing 
service contracts as they are recompeted and should, to the extent 
possible, incorporate such requirements and preferences into existing 
contracts as they are modified or extended through options.
    As directed by section 553(b)(3), Federal agencies should include 
criteria for energy efficiency that are consistent with the criteria 
used for rating qualified products in the factors for the evaluation 
of:
     Offers received for procurements involving covered 
products, and
     Offers received for construction, renovation, and services 
contracts that include provisions for covered products.
    Agencies should notify their vendors of the Federal requirements 
for energy efficient purchasing.
    Guidance is available for developing model contract language for 
contracts which involve covered products. Model contract language for 
all ENERGY STAR qualified and FEMP designated products can be found at 
http://www.eere.energy.gov/femp/procurement/eep_modellang.html. 
Moreover, there are guide specification requirements which have already 
been incorporated in existing specifications such as the Unified 
Facilities Guide Specifications, which are available at http://
www.wbdg.org/ccb/browse_org.php?o=70, and EPA's Federal Guide for 
Green Construction Specifications, which is available at http://
www.wbdg.org/design/greenspec.php.
    Further, FEMP offers a series of training opportunities for 
procurement staff that are listed at http://www.eere.energy.gov/femp/
services/training_catalog.html. New classes are periodically added to 
the Web site. Procurement officials are encouraged to take advantage of 
these training opportunities, which can provide a useful context to 
understand the benefits of energy efficient technologies and the 
innovative financing strategies available to fund them.
    Although energy consuming products or systems that are designed or 
procured for combat or combat-related missions are not subject to the 
requirements of this subpart (see Sec.  436.40 of this subpart), DOE 
encourages the Department of Defense to incorporate energy efficiency 
criteria into procurements of combat-related equipment, to the extent 
practicable.

C. Exceptions

    As stated above, section 553 provides for exceptions to the 
procurement requirements. Under the statute, an agency may only procure 
an energy consuming product that is not an ENERGY STAR qualified or 
FEMP designated product if the head of the agency finds in writing that 
an exception applies. (42 U.S.C. 8259b(b)(2)) Under section 553(b)(2) a 
written exception can only be made if one of two criteria are met. (42 
U.S.C. 8259b(b)(2)) The first criterion requires an agency head to find 
that a product is not life-cycle cost-effective in the

[[Page 10834]]

application for which it will be used. (42 U.S.C. 8259b(b)(2)(A)) 
Although ENERGY STAR qualified and FEMP designated products are life-
cycle cost-effective under normal use conditions, they may not be if 
used in a specialized way or for very limited hours. When making a 
determination that a product is not life-cycle cost-effective, an 
agency should rely on the life-cycle cost analysis method in part 436, 
subpart A, of title 10 of the Code of Federal Regulations, or another 
method determined by the agency to be equivalent.
    The second criterion requires an agency head to find that there is 
no ENERGY STAR qualified or FEMP designated product reasonably 
available that meets the functional requirements of the agency. (42 
U.S.C. 8259b(b)(2)(B))

IV. Regulatory Review

A. Executive Order 12866

    Today's final rule has been determined not to be a ``significant 
regulatory action'' under section 3(f)(1) of Executive Order 12866, 
Regulatory Planning and Review. (58 FR 51735; October 4, 1993).

B. National Environmental Policy Act

    DOE has determined that this rule is covered under the Categorical 
Exclusion found in DOE's National Environmental Policy Act regulations 
at paragraph A.6 of Appendix A to subpart D, 10 CFR part 1021. That 
Categorical Exclusion applies to rulemakings that are strictly 
procedural, such as rulemaking establishing a reporting requirement 
applicable to contracting practices for the purchase of goods and 
services. The rule establishes guidance for Federal agencies with 
regard to the requirements of section 553 to procure energy efficient 
products and develop procurement practices which facilitate the 
purchase of energy efficient products.
    The rule would not establish any procurement requirements. 
Accordingly, DOE has not prepared an environmental assessment or an 
environmental impact statement.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities.
    As required by Executive Order 13272, ``Proper Consideration of 
Small Entities in Agency Rulemaking,'' (67 FR 53461; August 16, 2002), 
DOE published procedures and policies on February 19, 2003, to ensure 
that the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990; Feb. 19, 2003. 
The Department has made its procedures and policies available on the 
Office of General Counsel's Web site: http://www.gc.doe.gov.
    DOE has reviewed today's rule under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003. Today's final rule applies only to Federal agencies. 
Today's final rule will not impact small entities. In addition, the 
final rule only facilitates Federal agency compliance with a statutory 
mandate to procure ENERGY STAR qualified and FEMP designated products. 
On the basis of the foregoing, DOE certifies that this rule would not 
have a significant economic impact on a substantial number of small 
entities. Accordingly, DOE has not prepared a regulatory flexibility 
analysis for this rulemaking. This certification and supporting 
statement of factual basis will be provided to the Chief Counsel for 
Advocacy of the Small Business Administration pursuant to 5 U.S.C. 
605(b).

D. Paperwork Reduction Act

    No new record keeping requirements, subject to the Paperwork 
Reduction Act, 44 U.S.C. 3501, et seq., are imposed by this final rule.

E. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally 
requires Federal agencies to examine closely the impacts of regulatory 
actions on State, local, and tribal governments, or the private sector. 
Subsection 101(5) of title I of that law defines a Federal 
intergovernmental mandate to include any regulation that would impose 
upon State, local, or tribal governments an enforceable duty, except a 
condition of Federal assistance or a duty arising from participating in 
a voluntary Federal program. Title II of that law requires each Federal 
agency to assess the effects of Federal regulatory actions on State, 
local, and tribal governments, in the aggregate, or to the private 
sector, other than to the extent such actions merely incorporate 
requirements specifically set forth in a statute. Section 202 of that 
title requires a Federal agency to perform a detailed assessment of the 
anticipated costs and benefits of any rule that includes a Federal 
mandate which may result in costs to State, local, or tribal 
governments, or to the private sector, of $100 million or more.
    Section 204 of that title requires each agency that proposes a rule 
containing a significant Federal intergovernmental mandate to develop 
an effective process for obtaining meaningful and timely input from 
elected officers of State, local, and tribal governments.
    This rule does not impose a Federal mandate on State, local, or 
tribal governments or the private sector. Accordingly, no assessment or 
analysis is required under the Unfunded Mandates Reform Act of 1995.

F. Treasury and General Government Appropriations Act, 1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being.
    This final rule will not have any impact on the autonomy or 
integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

G. Treasury and General Government Appropriations Act, 2001

    The Treasury and General Government Appropriations Act, 2001 (44 
U.S.C. 3516 note) provides for agencies to review most disseminations 
of information to the public under guidelines established by each 
agency pursuant to general guidelines issued by OMB. OMB's guidelines 
were published at 67 FR 8452 (February 22, 2002). DOE's guidelines were 
published at 67 FR 62446 (October 7, 2002).
    DOE has reviewed today's final rule under the OMB and DOE 
guidelines and has concluded that it is consistent with applicable 
policies in those guidelines.

H. Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' (61 FR 4729; February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect, if any; (2) clearly

[[Page 10835]]

specifies any effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction; (4) specifies the retroactive 
effect, if any; (5) adequately defines key terms; and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in section 3(a) and section 3(b) to 
determine whether they are met or it is unreasonable to meet one or 
more of them.
    DOE has completed the required review and determined that, to the 
extent permitted by law, this rule meets the relevant standards of 
Executive Order 12988.

I. Executive Order 13132

    Executive Order 13132, ``Federalism,'' (64 FR 43255; August 4, 
1999), imposes certain requirements on agencies formulating and 
implementing policies or regulations that preempt State law or that 
have federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735; Mar. 14, 2000.
    DOE has examined this rule and determined that it does not preempt 
State law and does not have a substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of Government. No further action is required by Executive Order 
13132.

J. Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001) requires Federal agencies to prepare and submit to the 
Office of Information and Regulatory Affairs (OIRA), Office of 
Management and Budget, a Statement of Energy Effects for any proposed 
significant energy action. A ``significant energy action'' is defined 
as any action by an agency that promulgated or is expected to lead to 
promulgation of a final rule, and that: (1) Is a significant regulatory 
action under Executive Order 12866, or any successor order; and (2) is 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy; or (3) is designated by the 
Administrator of OIRA as a significant energy action. For any proposed 
significant energy action, the agency must give a detailed statement of 
any adverse effects on energy supply, distribution, or use should the 
proposal be implemented, and of reasonable alternatives to the action 
and their expected benefits on energy supply, distribution, and use.
    This final rule will not have a significant adverse effect on the 
supply, distribution, or use of energy and, therefore, is not a 
significant energy action. Accordingly, DOE has not prepared a 
Statement of Energy Effects.

V. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is not a ``major rule'' 
as defined by 5 U.S.C. 804(2).

VI. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's final 
rule.

List of Subjects in 10 CFR Parts 436

    Energy conservation, Federal buildings and facilities, Reporting 
and recordkeeping requirements, Solar energy.

    Issued in Washington, DC, on March 5, 2009.
Rita L. Wells,
Acting Deputy Assistant Secretary for Business Administration, Energy 
Efficiency and Renewable Energy.

0
For the reasons set forth in the preamble, DOE is amending Chapter II 
of Title 10 of the Code of Federal Regulations as set forth below.

PART 436--FEDERAL ENERGY MANAGEMENT AND PLANNING PROGRAMS

0
1. The authority citation for part 436 is revised to read as follows:

    Authority: 42 U.S.C. 7101 et seq.; 42 U.S.C. 8258; 42 U.S.C. 
8259b.


0
2. Subpart C is added to part 436 to read as follows:

Subpart C--Agency Procurement of Energy Efficient Products

Sec.
436.40 Purpose and scope.
436.41 Definitions.
436.42 Evaluation of Life-Cycle Cost Effectiveness
436.43 Procurement Planning.


Sec.  436.40  Purpose and scope.

    This subpart provides guidance to promote the procurement of energy 
efficient products by Federal agencies and promote procurement 
practices which facilitate the procurement of energy efficient 
products, consistent with the requirements in section 553 of the 
National Energy Conservation Policy Act. (42 U.S.C. 8259b)


Sec.  436.41  Definitions.

    Agency means each authority of the Government of the United States, 
whether or not it is within or subject to review by another agency, but 
does not include--
    (1) The Congress, and agencies thereof;
    (2) The courts of the United States;
    (3) The governments of the territories or possessions of the United 
States; or
    (4) The government of the District of Columbia.
    Covered product means a product that is of a category for which an 
ENERGY STAR qualification or FEMP designation is established.
    ENERGY STAR qualified product means a product that is rated for 
energy efficiency under an ENERGY STAR program established by section 
324A of the Energy Policy and Conservation Act (42 U.S.C. 6294a).
    FEMP designated product means a product that is designated under 
the Federal Energy Management Program as being among the highest 25 
percent of equivalent products for energy efficiency.


Sec.  436.42  Evaluation of Life-Cycle Cost Effectiveness.

    For the purpose of compliance with section 553 of the National 
Energy Conservation Policy Act:
    (a) ENERGY STAR qualified and FEMP designated products may be 
assumed to be life-cycle cost-effective.
    (b) In making a determination that a covered product is not life-
cycle cost-effective, an agency should rely on the life-cycle cost 
analysis method in part 436, subpart A, of title 10 of the Code of 
Federal Regulations.


Sec.  436.43  Procurement planning.

    (a) Agencies should consider the procurement planning requirements 
of section 553 of the National Energy Conservation Policy Act as 
applying to:

[[Page 10836]]

    (1) Design, design/build, renovation, retrofit and services 
contracts; facility maintenance and operations contracts;
    (2) Energy savings performance contracts and utility energy service 
contracts;
    (3) If applicable, lease agreements for buildings or equipment, 
including build-to-lease contracts;
    (b) Agencies should require the procurement of ENERGY STAR and FEMP 
designated products in new service contracts and other existing service 
contracts as they are recompeted and should, to the extent possible, 
incorporate such requirements and preferences into existing contracts 
as they are modified or extended through options.
    (c) Agencies should include criteria for energy efficiency that are 
consistent with the criteria used for rating qualified products in the 
factors for the evaluation of:
    (1) Offers received for procurements involving covered products, 
and
    (2) Offers received for construction, renovation, and services 
contracts that include provisions for covered products.
    (d) Agencies should notify their vendors of the Federal 
requirements for energy efficient purchasing.

 [FR Doc. E9-5459 Filed 3-12-09; 8:45 am]
BILLING CODE 6450-01-P