[Federal Register Volume 78, Number 251 (Tuesday, December 31, 2013)]
[Unknown Section]
[Pages 79643-79649]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31273]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket No. EERE-2013-BT-PET-0043]


Energy Conservation Program for Consumer Products: Landmark Legal 
Foundation; Petition for Reconsideration

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

[[Page 79644]]


ACTION: Petition for reconsideration; Notice of denial.

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SUMMARY: This document announces the Department of Energy's (DOE) 
denial of a petition from the Landmark Legal Foundation (LLF) 
requesting reconsideration of DOE's final rule of energy conservation 
standards for standby mode and off mode for microwave ovens. DOE 
published the LLF petition and a request for comments in the Federal 
Register on August 16, 2013. Based upon its evaluation of the petition 
and careful consideration of the public comments, DOE has decided to 
deny this petition for rulemaking.

DATES: This denial was issued on December 24, 2013.

ADDRESSES: Docket: For access to the docket to read the petition or 
comments received thereon, go to the Federal eRulemaking Portal at 
http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-PET-0043. In 
addition, electronic copies of the Petition are available online at 
DOE's Web site at http://www.regulations.gov/#!docketDetail;D=EERE-
2013-BT-PET-0043. For access to the docket for DOE's energy 
conservation standards for microwave ovens, go to the Federal 
eRulemaking Portal at https://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/48.

FOR FURTHER INFORMATION CONTACT: John Cymbalsky, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, 
DC 20585-0121. Telephone: (202) 287-1692. Email: 
John.Cymbalsky@ee.doe.gov.
    Ami Grace-Tardy, U.S. Department of Energy, Office of the General 
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-5709. Email: Ami.Grace-Tardy@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. The SCC Analysis Did Not Change the Final Standard as Proposed 
or Adopted
III. The Final Rule Was the Logical Outgrowth of the Proposed Rule
IV. Comments on Sufficiency of the Science and Precedential Effects
V. Conclusion

I. Background

    The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., 
provides, among other things, that ``[e]ach agency shall give an 
interested person the right to petition for the issuance, amendment, or 
repeal of a rule.'' (5 U.S.C. 553(e).) DOE received a petition from the 
Landmark Legal Foundation (LLF) on July 2, 2013, requesting that DOE 
reconsider its final rule of Energy Conservation Standards for Standby 
Mode and Off Mode for Microwave Ovens, Docket No. EERE-2011-BT-STD-
0048, RIN 1904-AC07, 78 FR 36316 (June 17, 2013) (``final rule'').
    The final rule was adopted by DOE in accordance with the Energy 
Policy and Conservation Act of 1975 (EPCA; 42 U.S.C. 6291 et seq.). See 
78 FR 36316. Under EPCA, any new or amended energy conservation 
standard shall achieve the maximum improvement in energy efficiency 
that the Secretary determines is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(3)(A)-(B)) In deciding 
whether an amended standard is economically justified, DOE must 
determine whether the benefits of the standard exceed its burdens. (42 
U.S.C. 6295(o)(2)(B)(i)) DOE must make this determination by 
considering, to the greatest extent practicable, seven factors set out 
in EPCA. Id. On June 17, 2013, DOE published a final rule adopting 
standby mode and off mode standards that DOE determined would result in 
significant conservation of energy and that were technologically 
feasible and economically justified. See 78 FR 36316.
    The final rule was the result of a rulemaking that began in 2008 
and resulted in a decision by DOE to analyze potential energy 
conservation standards for the active mode of microwave ovens separate 
from the standby and off modes of microwave ovens. See 73 FR 62034 
(October 17, 2008). In April 2009, DOE concluded that it should defer a 
decision regarding amended energy conservation standards that would 
address standby and off modes for microwave ovens pending further 
rulemaking and finalized a ``no standard'' standard for microwave oven 
active mode energy use. 74 FR 16040 (April 8, 2009).
    DOE issued a Supplemental Notice of Proposed Rulemaking (SNOPR) on 
February 14, 2012, that proposed energy conservation standards for 
microwave oven stand by and off modes. 77 FR 8526. In the SNOPR, as 
part of its economic analysis of the proposed rule, DOE sought to 
monetize the cost savings associated with the reduced carbon dioxide 
(CO2) emissions that would result from the expected energy 
savings of the proposed rule. To do this, DOE used the most recent 
values of the Social Cost of Carbon (SCC) available, which, at the 
time, was the SCC calculation developed by the ``Interagency Working 
Group on Social Cost of Carbon 2010.''\1\ 77 FR 8555.
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    \1\ Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf.
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    Monetizing the cost savings associated with the reduced carbon 
emissions has been routine practice in DOE energy conservation 
standards rulemakings. The purpose of the SCC estimates presented in 
the microwave oven rule, and other DOE energy conservation standards 
rulemakings, was to allow DOE to assess the monetized social benefits 
of reducing CO2 emissions as part of the analysis of these 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. In the rulemaking at-hand and many other 
past rulemakings, DOE has utilized SCC values to calculate whether the 
economic effect of reduced CO2 emissions impacts the 
Department's regulatory decision. As evidenced by Table I-3 in the 
final rule, DOE calculates a standard's SCC values and incorporates 
those calculations in the analysis for the rulemaking to see whether, 
and if so how, the weighing of benefits and costs is impacted when the 
SCC values are also applied to the standard. See 78 FR 36318-19. The 
SCC values may or may not affect DOE's decision on a final standard.
    DOE includes an analysis with SCC values because under section 
1(b)(6) of Executive Order 12866, ``Regulatory Planning and Review,'' 
58 FR 51735 (October 4, 1993), agencies must, to the extent permitted 
by law, assess both the costs and the benefits of the intended 
regulation and, recognizing that some costs and benefits are difficult 
to quantify, propose or adopt a regulation only upon a reasoned 
determination that the benefits of the intended regulation justify its 
costs. The Interagency Working Group on Social Cost of Carbon 
(``Interagency Working Group'' or ``IWG'') was formed to allow agencies 
to incorporate the monetized social benefits of reducing CO2 
emissions into cost-benefit analyses of regulatory actions that have 
small, or ``marginal,'' impacts on cumulative global emissions (such as 
the rule at-hand). DOE has incorporated SCC values into its rulemakings 
since the first microwave oven notice of proposed rulemaking (NOPR) in 
2008.
    As described in the SNOPR, the 2010 SCC values were developed 
through an interagency process in accordance with Executive Order 
12866. In the 2012 SNOPR, DOE stated that the IWG planned to update the 
2010 SCC as DOE's understanding of climate change and its impacts on 
society improves

[[Page 79645]]

over time, specifically noting that the interagency group had set a 
preliminary goal of revisiting the SCC values within two years or at 
such time as substantially updated models become available. 77 FR 8553-
54.
    In May 2013, subsequent to the SNOPR but prior to DOE's issuance of 
the final rule, the IWG released revised SCC values. (``Technical 
Update of the Social Cost of Carbon for Regulatory Impact Analysis 
Under Executive Order 12866,'' Interagency Working Group on Social Cost 
of Carbon, United States Government, 2013\2\) As these were ``the most 
recent (2013) SCC values from the interagency group,'' DOE included 
both these revised SCC values and the 2010 SCC values in the final 
rule. 78 FR 36318.
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    \2\ Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
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    On November 1, 2013, the Office of Information and Regulatory 
Affairs at the Office of Management and Budget (OMB) announced minor 
technical corrections to the 2013 SCC values, which result in a central 
estimated value of the Social Cost of Carbon in 2015 of $37 per metric 
ton of CO2, instead of the $38 per metric ton of 
CO2 estimate released in May 2013.\3\ This change is based 
on two corrections made to the runs based on the FUND model.\4\ OMB 
also announced a new opportunity for public comment on the revised TSD 
underlying the SCC estimates in addition to the public comment 
opportunities already available through particular rulemakings. In a 
November 26, 2013 notice, OMB described the changes detailed above and 
announced a 60-day public comment period on all aspects of the revised 
TSD. 78 FR 70586.
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    \3\ See http://www.whitehouse.gov/blog/2013/11/01/refining-estimates-social-cost-carbon.
    \4\ See Appendix B, available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
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    DOE adjusted Table 1-3 as displayed in the final rule to account 
for these minor technical corrections to the 2013 SCC values. As 
evidenced by the information displayed Table 1 below, the corrections 
to the 2013 SCC values, when evaluated as part of the analysis, did not 
significantly alter the net benefits of the final rule.

  Table 1--Summary of National Economic Benefits and Costs of Microwave
            Oven Standby Power Energy Conservation Standards
------------------------------------------------------------------------
                                           Present value
                Category                     (Million      Discount rate
                                              2011$)         (percent)
------------------------------------------------------------------------
Benefits:
Operating Cost Savings..................           2,306               7
                                                   4,717               3
------------------------------------------------------------------------
            Using November 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value ($12.6/t               254               5
 case)*.................................
CO2 Reduction Monetized Value ($40.0/t             1,166               3
 case)*.................................
CO2 Reduction Monetized Value ($62.2/t             1,853             2.5
 case)*.................................
CO2 Reduction Monetized Value ($118/t              3,599               3
 case)*.................................
NOX Reduction Monetized Value (at $2,567/           21.8               7
 ton)*..................................            44.5               3
                                         -------------------------------
    Total Benefits [dagger].............           3,493               7
                                                   5,927               3
------------------------------------------------------------------------
               Using May 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value ($12.6/t               255               5
 case)*.................................
CO2 Reduction Monetized Value ($41.1/t             1,179               3
 case)*.................................
CO2 Reduction Monetized Value ($63.2/t             1,876             2.5
 case)*.................................
CO2 Reduction Monetized Value ($119/t              3,615               3
 case)*.................................
NOX Reduction Monetized Value (at $2,567/           21.8               7
 ton)*..................................            44.5               3
                                         -------------------------------
    Total Benefits [dagger].............           3,507               7
                                                   5,941               3
Costs:
Incremental Installed Costs.............             776               7
                                                   1,341               3
Net Benefits (using Revised May 2013 SCC
 values):
Including CO2 and NOX Reduction                    2,717               7
 Monetized Value........................           4,586               3
Net Benefits (using November 2013 SCC
 values):
Including CO2 and NOX Reduction                    2,731               7
 Monetized Value........................           4,600               3
------------------------------------------------------------------------
* The CO2 values represent global values of the social cost of CO2
  emissions (in 2011$) in 2016 under several scenarios. The first three
  values are averages of SCC distributions calculated using 5%, 3%, and
  2.5% discount rates, respectively. The fourth value represents the
  95th percentile of the SCC distribution calculated using a 3% discount
  rate. The value for NOX is the mid-range value used in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to SCC value of $40.0/t or $41.1/t in 2015
  (derived from the 3% discount rate value for SCC).


[[Page 79646]]

    Before the revisions to the 2013 SCC values were announced in 
November 2013, on July 2, 2013, LLF petitioned DOE to reconsider the 
final rule on the grounds that the SCC values were a critical part of 
the cost-benefit analysis in this rulemaking and that the SCC values 
changed from the SNOPR phase to the final rule phase of the rulemaking 
without an opportunity for public comment on those changed values.\5\ 
See 78 FR 49976-78. LLF's primary contention is that DOE's used the 
2013 SCC values in the final rule (as opposed to the 2010 SCC values 
used in the SNOPR) without sufficient notice and an opportunity for 
public comment in violation of the APA and Executive Order 13563 (76 FR 
3281 (January 21, 2011)). LLF stated that the SCC value change is a 
fundamental change in a critical component of DOE's analysis, which the 
Department was required to publish and provide an opportunity for 
public comment on prior to use in the final rule. See 78 FR 49977. 
Because the change in SCC values could affect how other agencies use 
the SCC when calculating the costs and benefits of other rules relating 
to greenhouse gasses, LLF contends that the change in SCC values is 
``significant and wide reaching.'' See id. LLF requested that DOE 
immediately rescind the final rule and halt implementation of the rule 
or, in the alternative, publish the changes described in the petition 
and provide an opportunity for public comment. 78 FR 49978.
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    \5\ LLF's petition and associated comments can be found under 
Docket No. EERE-BT-PET-0043 found at: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-PET-0043.
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    As noted above, DOE published a document in the Federal Register on 
August 16, 2013, containing the petition and requesting public comment. 
78 FR 49975. DOE received comments from non-governmental organizations, 
manufacturers, and utilities. DOE received comments from the Laclede 
Gas Company (Laclede), Heritage Foundation (Heritage), Tri-State 
Generation and Transmission Association, Inc. (Tri-State), Southeastern 
Legal Foundation, Inc. (Southeastern), Florida Municipal Electric 
Association (FMEA), Gainesville Regional Utilities (GRU), Science and 
Environmental Policy Project (SEPP), Competitive Enterprise Institute 
(CEI), Association of Home Appliance Manufacturers (AHAM), 
Environmental Defense Fund (EDF), joint comments from the American 
Chemistry Council, American Petroleum Institute, National Association 
of Home Builders, Portland Cement Association, American Forest & Paper 
Association, Council of Industrial Boiler Owners, and National Mining 
Association (collectively, ACC), National Federation of Independent 
Businesses (NFIB), the American Petroleum Institute (API), American 
Fuel and Petrochemicals Manufacturers (AFPM), American Public Gas 
Association (APGA), Utility Air Regulatory Group (UARG), George 
Washington University Regulatory Studies Center (GWU-RSC), Right 
Climate Stuff Research Team (TRCS), Institute for Energy Research 
(IER), AFFORD Coalition (AFFORD), Industrial Energy Consumers of 
America (IECA), American Gas Association (AGA), Cato Institute Center 
for Study of Science (Cato), Consumers Energy (CE), American for Tax 
Reform (ATR), George Mason University Mercatus Center (George Mason), 
U.S. Chamber of Commerce (Chamber), National Association of 
Manufacturers (NAM), joint comments from Appliance Standards Awareness 
Project, Earthjustice, Natural Resources Defense Council (collectively, 
ASAP), and several individuals. With the exception of the commenters 
discussed below, all of the commenters listed above support LLF's 
petition. Like LLF, they did not find fault with the standby and off 
mode energy conservation standards themselves, but rather criticized 
DOE's use of the SCC values.
    Three commenters (Chamber, AHAM, and NAM) support some of the 
contentions in LLF's petition, but urged DOE not to reconsider the 
rule. AHAM stated that it opposes LLF's petition because granting it 
would ``seriously disrupt'' the certainty regarding microwave oven 
standby and off mode standards that manufacturers are using for 
planning and investment. (AHAM, No. 33) \6\ NAM requested that DOE 
remove the SCC from the microwave rule and finalize the rule to avoid 
any uncertainty to manufacturers. (NAM, No. 29)
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    \6\ Notations of this form appear throughout this document and 
identify statements made in written comments that DOE has received 
and has included in the docket for this petition. For example, 
``AHAM, No. 33'' refers to a comment from AHAM in document 33 in the 
docket of this rulemaking (available at: http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-PET-0043).
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    Three other commenters, including one set of joint comments from 
environmental and energy efficiency advocates, oppose the petition in 
its entirety and encouraged DOE to not reconsider the rule. (EDF, No. 
31; ASAP, No. 32; Adam Christensen (Christensen), No. 14) The following 
discussion summarizes and responds to comments on the LLF petition, as 
well as the LLF petition itself.

II. The SCC Analysis Did Not Impact the Standard as Proposed or Adopted

    As described above, DOE utilized SCC values--in both the SNOPR and 
final rule analysis--as a way to assess the economic effects of reduced 
CO2 emissions. DOE calculates a standard's SCC values and 
incorporates those calculations in the analysis for the rulemaking to 
see whether, and if so how, the weighing of benefits and costs is 
impacted when the SCC values are also applied to the standard. The SCC 
values may or may not affect DOE's decision on a final standard.
    In the microwave oven rule, the SCC analysis did not affect DOE's 
decision regarding the standards that were published in the Federal 
Register at either the proposed rule or final rule stage because the 
estimated benefits to consumers of the standard exceeded the costs of 
the standard, even without considering the SCC values. At the proposed 
rule stage, without adding any benefits from reducing CO2, 
the annualized operating cost savings at the proposed standard level 
were significantly larger than the annualized incremental product 
costs. See 77 FR 8528-59. At the final rule stage, rather than change 
the outcome of DOE's microwave oven standards, the updated May 2013 SCC 
values served only as an incremental increase in the benefits of the 
standards that DOE had already proposed adopting. See 78 FR 36318. 
Specifically, the $4.2 billion net benefits of the SNOPR increased to 
$4.6 billion in the final rule as a result of the change in SCC values 
to the 2013 updated values. See id. Again, as with the SNOPR, the 
operating cost savings were significantly larger than the incremental 
installed costs, even without adding in the economic effect of reduced 
CO2 emissions. See 78 FR 36318-20. Given DOE's legal 
obligation to establish any new or amended energy conservation standard 
at the point that achieves the maximum improvement in energy efficiency 
that the Secretary determines is technologically feasible and 
economically justified (42 U.S.C. 6295(o)(3)(A)-(B)), and given that in 
deciding whether an amended standard is economically justified, DOE 
must determine whether the benefits of the standard exceed its burdens, 
DOE would have chosen the same energy conservation standards at both 
the proposed rule and final rule stage regardless of its SCC analysis.
    Finally, additional notice and comment is required in instances 
where the new data provided the ``most critical

[[Page 79647]]

factual material that is used to support the agency's position.'' 
(Chamber of Commerce of U.S., 443 F.3d at 900) UARG did not 
specifically contend that DOE violated the APA, but did comment that 
the SCC values are a ``critical assumption'' for DOE's economic 
analysis for the microwave oven rule, stating that Executive Order 
12866 requires DOE to provide the public notice and an opportunity to 
comment on the SCC values at both the proposed and final rule stage 
because the SCC values were, according to UARG, a critical assumption 
for DOE's economic analysis for the final rule. (UARG, No. 28) As 
described above, the SCC values were not critical to any analysis in 
DOE's final rule. Although the SCC values increased in the 2013 update, 
this input did not influence DOE's decision regarding the final energy 
conservation standard chosen. DOE proposed the same standard in the 
SNOPR as it finalized in the final rule.\7\
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    \7\ There is no dispute that DOE accepted public comment on the 
2008 proposed rule and 2012 SNOPR.
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    Because DOE adopted the same standard in the final rule that it had 
proposed in the SNOPR, LLF has not demonstrated that the Department 
would--or even might--have changed the standard adopted in the final 
rule if LLF (and others) had been given an opportunity to comment on 
the 2013 SCC values. To the contrary, even if comments had convinced 
DOE not to update the SCC values, given that DOE adopted the same 
standard it had proposed based on the 2010 SCC values DOE would have 
chosen the same standards as it did in the final rule. Moreover, as 
described previously, the other benefits of the rule so outweighed its 
costs that DOE's choice of a proposed standard was not influenced by 
the SCC analysis. Even when the SCC values increased, DOE's choice of a 
final standard was not influenced by the SCC analysis. As demonstrated 
in the table above, this remains the case even applying the 
modifications released by OMB on November 1. Therefore, any 
reconsideration of the microwave oven rule would be an inefficient use 
of government resources and would not inform further the choice of 
final standard to be adopted.

III. The Final Rule Was the Logical Outgrowth of the Proposed Rule

    In response to the notice of LLF's petition, many commenters agreed 
with LLF that because the final rule applied the 2013 SCC values 
whereas the SNOPR applied the 2010 SCC values and there was not an 
opportunity for the public to comment on the change to the SCC values 
between the SNOPR and final rule stages, the notice and comment 
requirements under the APA were violated. (Laclede, No.7; Tri-State, 
No. 18; Southeastern, No. 17; GRU, No. 21; CEI, No. 34; AHAM, No. 33; 
NFIB, No. 6; API, No. 30; NAM, No. 29; George Mason, No. 11; AFPM, No. 
16; APGA, No. 13; GWU-RSC, No. 5; Chamber, No. 23; TRCS, No. 25; IER, 
No. 9; AFFORD, No. 20; IECA, No. 22; AGA, No. 10; Cato, No. 8; CE, No. 
15; ATR, No. 12; ACC, No. 29; FMEA, No. 19; Heritage, No. 26) A few 
commenters contended that the notice provided by the entirety of DOE's 
rulemaking easily provided sufficient notice and comment regarding the 
SCC values and the final rule (and associated SCC values) were the 
logical outgrowth of the SNOPR. (ASAP, No. 32; EDF, No. 31; 
Christensen, No. 14) \8\
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    \8\ Because DOE concludes in this notice to deny the petition, 
DOE does not here detail the legal arguments put forth by these 
organizations as to why DOE should deny the petition. It should be 
noted, however, that DOE bases its decision to deny the petition on 
some of the legal bases included in these comments, but does not 
address each legal basis discussed by commenters in this notice.
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    The APA requires Federal agencies to give interested persons an 
opportunity to participate in a rulemaking through submission of 
written data, views or arguments, after the Federal agency gives proper 
notice. (5 U.S.C. 553(c)) As described, DOE has provided the public 
with notice and the opportunity to comment throughout this rulemaking, 
including the opportunity to comment on DOE's use of the SCC values. In 
the SNOPR, DOE sought to monetize the cost savings associated with the 
reduced carbon emissions that would result from the energy conservation 
standards, if adopted. DOE included in the SNOPR Technical Support 
Document (TSD) a robust description of the data source, the peer-
reviewed economic models (the FUND, DICE, and PAGE models) and the 
methodology used to derive the SCC.\9\ Further, DOE explicitly stated 
in the SNOPR, SNOPR TSD, final rule, and final rule TSD that, while the 
methodology used to derive the SCC would not change, the SCC values 
used in the rulemaking were undergoing review and were subject to 
change based on updated inputs to the models. In the SNOPR, DOE stated 
that the 2010 SCC estimates were presented and utilized in DOE's 
analyses with an acknowledgement that many uncertainties are involved 
and with a clear understanding that the estimates should be updated 
over time to reflect increased knowledge of the science and economics 
of climate change. 77 FR 8553. At the time of the SNOPR's publication, 
the 2010 SCC values were used because they were, at the time, the most 
recent interagency estimates. Id. DOE cautioned, however, that the 
interagency process planned to update these estimates as the science 
and economic understanding of climate change and its impact on society 
improved over time, noting that the interagency group had set a 
preliminary goal of revisiting the SCC values within two years or at 
such time as substantially updated models become available. Id. at 
8554. DOE stated that current SCC estimates should be treated as 
``provisional and revisable'' because the values will evolve with 
improved scientific and economic understanding. Id. at 8555. These 
statements were reiterated in chapter 16 of the TSD that supported the 
SNOPR.\10\ The SNOPR TSD included the 2010 IWG's TSD.
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    \9\ The SCC was also discussed in the 2008 NOPR (proposing the 
development of separate standards for microwave ovens in active, 
standby and off modes) and the 2009 final rule (finalizing a ``no 
standard'' standard for microwave ovens in active mode and deferring 
the rulemaking for standby and off modes for microwave ovens). A 
different model and different SCC values were utilized for the 2008 
and 2009 rules than the models and SCC values used for the 2012 
SNOPR and 2013 final rule. For the 2008 and 2009 rules, DOE used the 
most current SCC values then available: those based on the estimates 
identified by the study cited in ``Summary for Policymakers,'' 
prepared by Working Group II of the IPCC's ``Fourth Assessment 
Report,'' to estimate the potential monetary value of CO2 
reductions likely to result from standards considered in the 
rulemaking, assigned a SCC value range of $0 to $20 (2007$) per ton 
of CO2 emissions in both rulemakings. See 74 FR 16079 
(April 8, 2009); 73 FR 62120 (October 17, 2008).
    \10\ See TSD, Chapter 16 and Appendix 16A, available at: http://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-0048-0002.
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    In the interim between the SNOPR and the final rule, in May 2013, 
the IWG released revised SCC values that estimated higher values for 
CO2 emissions avoided than the 2010 SCC values.\11\ 
According to OMB, since the release of the SCC values in February 2010, 
numerous rulemakings have used the 2010 values for the SCC and many of 
those rulemakings received extensive public comments, including 
comments on the discount rate chosen and the three peer-reviewed models 
used to develop the SCC estimates.\12\ Since the 2010 SCC values were 
published, the three models (the FUND, DICE, and PAGE models) that 
underpin the SCC estimates were all updated and used in

[[Page 79648]]

peer-reviewed literature.\13\ The changes made in May 2013 to the SCC 
estimates reflect the refinements to the underlying models, not to the 
methodology followed or to any Federal government inputs, such as 
discount rates, population growth, climate sensitivity distribution, 
and socio-economic trajectories.\14\
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    \11\ Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
    \12\ See Testimony of Howard Shelanski, available at: http://oversight.house.gov/wp-content/uploads/2013/07/Shelanski-OIRA-Testimony-SCC-7-18.pdf (July 18, 2013).
    \13\ See id.
    \14\ See id.
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    Consistent with its statement in the SNOPR that it would use the 
most recent SCC values, DOE utilized the 2013 SCC values in the June 
2013 final rule. Again, DOE stated that the SCC estimates are 
provisional and would be updated over time to reflect increasing 
knowledge of the science and economics of climate impacts. 78 FR 36349-
51. In the final rule, DOE described the updates to the three 
integrated assessment models that are used to estimate the SCC (FUND, 
DICE, and PAGE models). 78 FR 36349. The final rule TSD includes as 
appendices both the 2010 and 2013 interagency TSDs upon which the SCC 
values are based.\15\
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    \15\ See Appendix 16A and Appendix16B, available at: http://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-0048-0021.
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    The regulatory history cited above also refutes any contention 
that--the 2013 SCC values were not a ``logical outgrowth'' of the 
proposed rule--and therefore that the use of the 2013 SCC values 
violates the notice and opportunity to comment provisions of the APA. A 
final rule satisfies the ``logical outgrowth'' test if parties should 
have anticipated that the change at issue was possible and, thus, 
reasonably should have filed their comments during the comment period. 
(Ne. Md. Waste Disposal Auth. v. EPA, 358 F.3d 936, 952 (D.C. Cir. 
2004) (citing City of Waukesha v. EPA, 320 F.3d 228, 245 (D.C. Cir. 
2003)) An agency that adopts a final rule that differs from its 
proposed rules is required to provide notice and an additional 
opportunity for public comment when the changes are so major that the 
original notice did not adequately frame the subjects for discussion. 
The purpose of the new notice is to allow interested parties a fair 
opportunity to comment upon the final rules in their altered form. The 
agency need not renotice changes that follow logically from, or that 
reasonably develop, the rule the agency proposed originally. 
(Connecticut Light & Power Co. v. Nuclear Regulatory Comm'n, 673 F.2d 
525, 533 (D.C. Cir. 1982) (citations omitted))
    With regard to DOE's calculation of the monetized benefits 
associated with the reduced carbon emissions, DOE gave notice to 
interested parties both in the SNOPR and the TSD to the SNOPR that the 
agency was considering SCC values in its decision-making and that those 
SCC values were subject to change based on scientific and economic 
understanding of climate change and were expected to be updated 
approximately every two years.
    Moreover, DOE relied on SCC values that were generated from the 
same models (i.e., the FUND, DICE, and PAGE models) for both the SNOPR 
and final rule. In Solite Corporation v. EPA, the DC Circuit held that 
an agency is not required to provide additional notice and opportunity 
for comment when its ``methodology remain[s] constant'' and new data is 
used to ``check or confirm prior assessments.'' (952 F.2d 473, 485 
(D.C. Cir. 1991); see also Chamber of Commerce of U.S. v. S.E.C., 443 
F.3d 890, 900 (D.C. Cir. 2006)) Where, as here, an agency is continuing 
to use the same methodologies (i.e., the FUND, DICE, and PAGE models) 
but is updating the data used in those models, additional notice and 
comment is not required.
    LLF also contends that DOE disregarded its obligation to have a 
transparent, public rulemaking as required under Executive Order 13563. 
Several commenters agreed with LLF that DOE's change in SCC values was 
not transparent; some of these commenters argued that this apparent 
lack of transparency is a violation of Executive Order 13563 (see e.g., 
Southeastern, No. 17) whereas others pointed to the need for 
transparency in general as a means to good governance (see e.g., 
Chamber, No. 23). IER commented that the SCC process is a ``black box'' 
and because intermediate results from the modeling runs are not 
available, it is not possible for outside analysts to check the 
robustness of the IWG's conclusions. (IER, No. 9) Some entities 
commented that they would have raised a number of concerns regarding 
the basic assumptions and methodology made by the IWG with regard to 
the 2010 SCC values if notice and an opportunity for comment had been 
provided at that time. (FMEA, No. 19; GRU, No. 21) (See also Laclede, 
No. 7; Heritage, No. 26; NFIB, No. 6; API, No. 30; NAM, No. 29; APGA, 
No. 13; GWU-RSC, No. 5; TRCS, No. 25; IER, No. 9; IECA, No. 22; AGA, 
No. 10; Cato, No. 8; CEI, No. 34; ATR, No. 12; Todd Kiefer (Kiefer), 
No. 4)
    As evidenced by the regulatory history described previously, the 
rulemaking at hand provided the public a 60-day comment period during 
which comments were made through a variety of means and the materials 
related to the rulemaking were kept on the microwave oven docket on the 
regulations.gov Web site at http://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-STD-0048. As detailed at the same Web 
site, a public meeting was held on the SNOPR on March 14, 2012. The 
technical and scientific findings that DOE relied upon for its SNOPR 
and final rule were included in the rule itself, as well as the 
relevant TSDs. DOE's assessment with respect to the SCC was very 
clearly described in each of those documents. All of these materials 
were provided in a searchable format on the electronic docket. DOE 
accepted and responded to public comments on all aspects of this 
rulemaking.
    In response to the notice of LLF's petition, one stakeholder 
commented on DOE's authority under EPCA to evaluate SCC values when 
setting energy conservation standards. Laclede commented that section 
331 of EPCA, as amended, was intended to constrain cost-benefit 
analyses to utility costs, not ``environmental externalities'' such as 
the SCC. (Laclede, No. 7) As described above, DOE did not consider SCC 
as a utility cost in the microwave oven rulemaking.
    IECA also argued that DOE's use of the SCC makes DOE's rule 
``significant'' under Executive Order 12866 and OMB requirements 
because DOE intends to use the SCC in multiple rulemakings, which will 
increase costs to an amount above $100 million. (IECA, No. 22) DOE 
notes that the final rule was deemed to be an ``economically 
significant regulatory action'' under section 3(f)(1) of Executive 
Order 12866. Accordingly, as required by section 6(a)(3) of the 
Executive Order, DOE prepared a regulatory impact analysis that OMB 
reviewed in addition to OMB review of the final rule itself. See 78 FR 
36365.
    ACC commented that the IWG failed to disclose the effects and 
uncertainties related to alternative regulatory actions as required by 
OMB Circular A-4.\16\ (ACC, No. 29) Through its extensive analysis of 
different TSLs, including their effects and uncertainties, DOE met this 
requirement with regard to the final energy conservation standards as 
part of

[[Page 79649]]

its Executive Order 13563 review. See 78 FR 36365.
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    \16\ DOE recognizes that ACC and the Chamber both attached to 
their comments on the petition at-hand a September 4, 2013, petition 
to OMB for correction to the 2010 and 2013 SCC TSDs. Because those 
petitions are under consideration at OMB, in this notice, DOE only 
addresses the comments made in the microwave rule petition.
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IV. Comments on Sufficiency of the Science and Precedential Effects

    In responding to the August 16, 2013, Federal Register petition 
document, many commenters questioned the scientific and economic basis 
of the SCC values. These commenters made extensive comments about: the 
alleged lack of economic theory underlying the models; the sufficiency 
of the models for policy-making; potential flaws in the models' inputs 
and assumptions (including the discount rates and climate sensitivity 
chosen); whether there was adequate peer review of the three models; 
whether there was adequate peer review of the TSD supporting the 2013 
SCC values; \17\ whether the SCC estimates comply with OMB's ``Final 
Information Quality Bulletin for Peer Review'' \18\ and DOE's own 
guidelines for ensuring and maximizing the quality, objectivity, 
utility and integrity of information disseminated by DOE; whether DOE's 
use of the updated SCC values has precedential effect for other agency 
rulemakings; and why DOE is considering global benefits of carbon 
dioxide emission reductions rather than solely domestic benefits. (See 
CEI, No. 34; Heritage, No. 24; IER, No. 9; Cato, No. 8; AFFORD, No. 20; 
ATR, No. 12; ACC, No. 29; AFPM, No. 16; FMEA, No. 19; Heritage, No 26; 
IECA, No. 22; TRCS, No. 25; SEEP No. 27; Kiefer, No. 4; ACC, No. 29; 
Chamber, No. 23; Laclede, No. 7; API, No. 30; APGA, No. 13; GWU-RSC, 
No. 5; AGA, No. 10; GRU, No. 21; NAM, No. 29; George Mason, No. 11)
---------------------------------------------------------------------------

    \17\ Available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
    \18\ Available at: http://www.cio.noaa.gov/services_programs/pdfs/OMB_Peer_Review_Bulletin_m05-03.pdf.
---------------------------------------------------------------------------

    As described above, OMB has announced minor technical corrections 
to the 2013 SCC values and a new opportunity for public comment on the 
revised TSD underlying the SCC estimates. Comments regarding the 
underlying science and potential precedential effect of the SCC 
estimates resulting from the interagency process should be directed to 
that process. See 78 FR 70586. Additionally, as EDF documented in its 
comments, several current rulemakings also use the 2013 SCC values and 
the public is welcome to comment on the values as applied in those 
rulemakings just as the public was welcome to comment on the use and 
application of the 2010 SCC values in the many rules that were 
published using those values in the past three years. (EDF, No. at pp. 
4-5).
    Finally, in addition to the topics above, commenters provided 
feedback on several other issues that go beyond the scope of the notice 
asking for comments on whether DOE should reconsider the microwave oven 
rule. IECA commented that the use of SCC values in regulation will 
negatively impact U.S. manufacturers, shipping U.S. production, jobs 
and investments overseas, which IECA contends would lead to more CO 
emissions by non-U.S. energy sources. IECA also questioned 
why the benefits of U.S. production to U.S. consumers and the economy 
are not considered by DOE. (IECA, No. 22) Other comments include 
statements about whether climate change is occurring at all, 
contentions that climate change may be natural and not human-caused, 
and that climate change may not have significant, adverse impacts; 
statements that all fossil-fueled power plants should be replaced with 
nuclear power plants and DOE should be reorganized to only work on 
nuclear issues; suggestions to use the IPCC Fifth Assessment Report 
when considering SCC values; statements that effects due to other 
greenhouse gases and other harms to society need to be included in the 
SCC as well; comments that the standards rule (apart from the SCC 
portion) must be reopened because the regulation fails to pass benefit-
cost tests because it assumes irrational consumer behavior; and 
questions about why comments on the Draft National Climate Assessment 
were not addressed in DOE's rule.

V. Conclusion

    After reviewing LLF's petition and comments on the petition, DOE 
has concluded that it has provided sufficient notice and the 
opportunity for public comment as required under the Administrative 
Procedure Act and a level of transparency in accordance with Executive 
Order 13563 regarding the use of SCC values in the microwave oven SNOPR 
and final rule. DOE has also concluded that reconsidering the microwave 
oven final rule would not result in any change to the standard 
ultimately adopted by DOE. As a result of the above analysis, and in 
consideration of LLF's petition and the comments received thereon, DOE 
denies the petition.

    Issued in Washington, DC, on December 24, 2013.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
[FR Doc. 2013-31273 Filed 12-30-13; 8:45 am]
BILLING CODE 6450-01-P