[Federal Register Volume 79, Number 244 (Friday, December 19, 2014)]
[Proposed Rules]
[Pages 76142-76189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29519]
[[Page 76141]]
Vol. 79
Friday,
No. 244
December 19, 2014
Part IV
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for
Residential Dishwashers; Proposed Rule
Federal Register / Vol. 79 , No. 244 / Friday, December 19, 2014 /
Proposed Rules
[[Page 76142]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EERE-2014-BT-STD-0021]
RIN 1904-AD24
Energy Conservation Program: Energy Conservation Standards for
Residential Dishwashers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking (NOPR) and public meeting.
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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as
amended, prescribes energy conservation standards for various consumer
products and certain commercial and industrial equipment, including
residential dishwashers. EPCA also requires the U.S. Department of
Energy (DOE) to determine whether amended standards would be
technologically feasible and economically justified, and would save a
significant amount of energy. In this notice, DOE proposes amended
energy conservation standards for residential dishwashers. The notice
also announces a public meeting to receive comment on these proposed
standards and associated analyses and results.
DATES: DOE will accept comments, data, and information regarding this
notice of proposed rulemaking (NOPR) before and after the public
meeting, but no later than February 17, 2015. See section VII Public
Participation for details.
DOE will hold a public meeting on Thursday, February 5, 2015, from
9 a.m. to 4 p.m., in Washington, DC. The meeting will also be broadcast
as a webinar. See section VII Public Participation for webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW.,
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at
(202) 586-2945. Please note that foreign nationals participating in the
public meeting are subject to advance security screening procedures
which require advance notice prior to attendance at the public meeting.
If a foreign national wishes to participate in the public meeting,
please inform DOE as soon as possible by contacting Ms. Regina
Washington at (202) 586-1214 or by email: [email protected] so
that the necessary procedures can be completed. Please also note that
those wishing to bring laptops into the Forrestal Building will be
required to obtain a property pass. Visitors should avoid bringing
laptops, or allow an extra 45 minutes. Persons can attend the public
meeting via webinar. For more information, refer to section VII of this
document (Public Participation).
Any comments submitted must identify the NOPR for Energy
Conservation Standards for residential dishwashers, and provide docket
number EERE-2014-BT-STD-0021 and/or regulatory information number (RIN)
number 1904-AD24. Comments may be submitted using any of the following
methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: [email protected]. Include the docket
number and/or RIN in the subject line of the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-5B, 1000 Independence Avenue SW.,
Washington, DC, 20585-0121. If possible, please submit all items on a
CD. It is not necessary to include printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC, 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD, in which case it is not necessary to
include printed copies.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by email to
[email protected].
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section VII of this document
(Public Participation).
Docket: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at regulations.gov. All
documents in the docket are listed in the regulations.gov index.
However, some documents listed in the index, such as those containing
information that is exempt from public disclosure, may not be publicly
available.
A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2014-BT-STD-0021. This Web
page will contain a link to the docket for this notice on the
regulations.gov site. The regulations.gov Web page will contain simple
instructions on how to access all documents, including public comments,
in the docket. See section VII for further information on how to submit
comments through www.regulations.gov.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact Ms. Brenda Edwards at (202) 586-2945 or by email:
[email protected].
FOR FURTHER INFORMATION CONTACT:
Mr. Bryan Berringer, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Program, EE-5B,
1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone:
(202) 586-0371. Email: [email protected].
Elizabeth Kohl, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 202-586-7796. Email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Residential Dishwashers
3. Residential Dishwasher Test Procedure History
III. General Discussion
A. Product Classes and Scope of Coverage
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
a. Savings in Operating Costs Compared to Increase in Price
b. Energy Savings
c. Lessening of Utility or Performance of Products
d. Impact of Any Lessening of Competition
e. Need for National Energy Conservation
[[Page 76143]]
f. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion
A. Market and Technology Assessment
1. Scope and Product Classes
2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Levels
a. Baseline Efficiency Levels
b. Higher Energy Efficiency Levels
2. Manufacturer Production Cost Estimates
D. Markups Analysis
E. Energy and Water Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy and Water Consumption
4. Energy Prices
5. Water and Wastewater Prices
6. Maintenance and Repair Costs
7. Product Lifetime
8. Discount Rates
9. Base-Case Efficiency Distribution
10. Inputs to Payback Period Analysis
11. Rebuttable-Presumption Payback Period
G. Shipments
H. National Impact Analysis
1. National Energy and Water Savings
a. Forecasted Efficiency in the Base Case and Standards Cases
2. Net Present Value Analysis
a. Total Installed Cost per Unit
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
a. Phase 1, Industry Profile
b. Phase 2, Industry Cash Flow Analysis
c. Phase 3, Sub-Group Impact Analysis
2. GRIM
a. GRIM Key Inputs
b. GRIM Scenarios
3. Manufacturer Interviews
K. Emissions Analysis
L. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Development of Social Cost of Carbon Values
c. Current Approach and Key Assumptions
2. Valuation of Other Emissions Reductions
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Sub-Groups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation to Conserve Energy
7. Summary of National Economic Impacts
8. Other Factors
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Residential
Dishwashers
2. Summary of Benefits and Costs (Annualized) of the Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
VII. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements For
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Summary of the Proposed Rule
Title III, Part B \1\ of the Energy Policy and Conservation Act of
1975 (EPCA or the Act), established the Energy Conservation Program for
Consumer Products Other Than Automobiles. Public Law 94-163 (as
codified in 42 U.S.C. 6291-6309).\2\ These products include residential
dishwashers, the subject of today's notice.
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\2\ All references to EPCA in this document refer to the statute
as amended through the American Energy Manufacturing Technical
Corrections Act (AEMTCA), Pub. L. 112-210 (Dec. 18, 2012).
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
(42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must
result in a significant conservation of energy. (42 U.S.C.
6295(o)(3)(B)) In accordance with these and other statutory provisions
discussed in this notice, DOE proposes amended energy conservation
standards for residential dishwashers. The proposed standards, which
are the maximum annual energy use and maximum per-cycle water
consumption for each product class, are shown in Table I.1. These
proposed standards, if adopted, would apply to all products listed in
Table I.1 and manufactured in, or imported into, the United States on
or after the date 3 years after the publication of any final rule for
this rulemaking. For purposes of the analysis conducted in support of
this proposed rule, DOE used 2016 as the expected year of publication
of any final standards.
Table I.1--Proposed Energy Conservation Standards for Residential
Dishwashers
[Compliance Starting 2019]
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Maximum annual Maximum per-cycle
Product class energy use* water consumption
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1. Standard (>=8 place settings 234 kilowatt-hours 3.1 gallons per
plus 6 serving pieces). per year (kWh/ cycle (gal/
year). cycle).
2. Compact (<8 place settings 203 kWh/year...... 3.1 gal/cycle.
plus 6 serving pieces).
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* Annual energy use, expressed in kilowatt-hours (kWh) per year, is
calculated as: The sum of the annual standby electrical energy in kWh
and the product of (1) the representative average dishwasher use
cycles per year and (2) the sum of machine electrical energy
consumption per cycle in kWh, the total water energy consumption per
cycle in kWh, and, for dishwashers having a truncated normal cycle,
the drying energy consumption divided by 2 in kWh. A truncated normal
cycle is defined as the normal cycle interrupted to eliminate the
power-dry feature after the termination of the last rinse option.
A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of residential dishwashers, as measured
by the average life-cycle cost (LCC) savings and the simple payback
period (PBP).\3\ The average LCC savings are positive for both the
standard and compact product classes. The PBP for both product classes
are also less than the projected
[[Page 76144]]
average lifetime of this product of approximately 15 years.
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\3\ The average LCC savings are measured relative to the base-
case efficiency distribution, which depicts the dishwasher market in
the compliance year (see section IV.F.9). The simple PBP, which is
designed to compare specific dishwasher efficiency levels, is
measured relative to the baseline dishwasher (see section IV.C.1.a).
Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of Residential Dishwashers
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Simple
Average LCC payback
Product class savings period
(2013$) (years)
------------------------------------------------------------------------
Standard...................................... 21 9.0
Compact....................................... 8 4.5
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B. Impact on Manufacturers
The industry net present value (INPV) is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (2014 to 2048). Using a real discount rate of 8.5
percent, DOE estimates that the INPV for manufacturers of residential
dishwashers is $586.6 million in 2013$. Under the proposed standards,
DOE expects that manufacturers may lose up to 34.7 percent of their
INPV, which is approximately $203.7 million. Additionally, based on its
analysis of available information, DOE does not expect any plant
closings or significant loss of employment.
C. National Benefits \4\
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\4\ All monetary values in this section are expressed in 2013
dollars and are discounted to 2014.
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DOE's analyses indicate that the proposed standards would save a
significant amount of energy. The lifetime savings for residential
dishwashers purchased in the 30-year period that begins in the year of
compliance with amended standards (2019-2048) amount to 1.06
quadrillion Btu (quads) \5\ and 0.24 trillion gallons of water. This is
a savings of 12 percent relative to the energy use of this product in
the base case.\6\
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\5\ A quad is equal to 10\15\ British thermal units (Btu).
\6\ The base case assumptions are described in section IV.G.
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The cumulative net present value (NPV) of total consumer costs and
savings of the proposed standards for residential dishwashers ranges
from $0.23 billion (at a 7-percent discount rate) to $ 2.14 billion (at
a 3-percent discount rate). This NPV expresses the estimated total
value of future operating-cost savings minus the estimated increased
product costs for products purchased in 2019-2048.
In addition, the proposed standards would have significant
environmental benefits. The energy savings described above would result
in cumulative emission reductions (over the same period as for energy
savings) of 61.9 million metric tons (Mt) \7\ of carbon dioxide
(CO2), 345.1 thousand tons of methane, 42.9 thousand tons of
sulfur dioxide (SO2), 126.7 thousand tons of nitrogen oxides
(NOX), 0.7 thousand tons of nitrous oxide (N2O),
and 0.1 tons of mercury (Hg).\8\ The cumulative reduction in
CO2 emissions through 2030 amounts to 14.6 Mt.
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\7\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\8\ DOE calculated emissions reductions relative to the Annual
Energy Outlook 2014 (AEO 2014) Reference case, which generally
represents current legislation and environmental regulations for
which implementing regulations were available as of October 31,
2013.
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The value of the CO2 reductions is calculated using a
range of values per metric ton of CO2 (otherwise known as
the Social Cost of Carbon, or SCC) developed by a recent Federal
interagency process.\9\ The derivation of the SCC values is discussed
in section IV.L of this notice. Using discount rates appropriate for
each set of SCC values, DOE estimates the present monetary value of the
CO2 emissions reduction described above is between $0.4
billion and $6.1 billion. DOE also estimates the present monetary value
of the NOX emissions reduction is $0.08 billion at a 7-
percent discount rate and $0.17 billion at a 3-percent discount
rate.\10\
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\9\ Technical Update of the Social Cost of Carbon for Regulatory
Impact Analysis Under Executive Order 12866. Interagency Working
Group on Social Cost of Carbon, United States Government. May 2013;
revised November 2013. http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
\10\ DOE is currently investigating valuation of avoided Hg and
SO2 emissions.
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Table I.3 summarizes the national economic costs and benefits
expected to result from the proposed standards for residential
dishwashers.
Table I.3--Summary of National Economic Benefits and Costs of Proposed
Energy Conservation Standards for Residential Dishwashers *
------------------------------------------------------------------------
Present value
Category billion 2013$ Discount rate
------------------------------------------------------------------------
Benefits
------------------------------------------------------------------------
Operating Cost Savings.................. 4.1 7%
9.2 3%
CO2 Reduction Monetized Value ($12.0/t 0.4 5%
case) **...............................
CO2 Reduction Monetized Value ($40.5/t 2.0 3%
case) **...............................
CO2 Reduction Monetized Value ($62.4/t 3.1 2.5%
case) **...............................
CO2 Reduction Monetized Value ($119/t 6.1 3%
case) **...............................
NOX Reduction Monetized Value (at $2,684/ 0.1 7%
ton)................................... 0.2 3%
Total Benefits [dagger]................. 6.2 7%
11.4 3%
------------------------------------------------------------------------
Costs
------------------------------------------------------------------------
3.9 7%
Incremental Installed Costs............. 7.1 3%
------------------------------------------------------------------------
Total Net Benefits
------------------------------------------------------------------------
2.3 7%
Including Emissions Reduction Monetized 4.3 3%
Value [dagger].........................
------------------------------------------------------------------------
* This table presents the costs and benefits associated with residential
dishwashers shipped in 2019-2048. These results include benefits to
consumers which accrue after 2048 from the products purchased in 2019-
2048. The results account for the incremental variable and fixed costs
incurred by manufacturers due to the standard, some of which may be
incurred in preparation for the rule.
[[Page 76145]]
** The CO2 values represent global monetized values of the SCC, in
2013$, in 2015 under several scenarios of the updated SCC values. The
first three cases use the averages of SCC distributions calculated
using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
represents the 95th percentile of the SCC distribution calculated
using a 3% discount rate. The SCC time series used by DOE incorporate
an escalation factor.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
the series corresponding to average SCC with 3-percent discount rate.
The benefits and costs of today's proposed standards, for products
sold in 2019-2048, can also be expressed in terms of annualized values.
The annualized monetary values are the sum of (1) the annualized
national economic value of the benefits from consumer operation of
products that meet the new or amended standards (consisting primarily
of operating cost savings from using less energy, minus increases in
equipment purchase and installation costs, which is another way of
representing consumer NPV), and (2) the annualized monetary value of
the benefits of emission reductions, including CO2 emission
reductions.\11\
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\11\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2014, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2020 or 2030), and then discounted the present value from
each year to 2014. The calculation uses discount rates of 3 and 7
percent for all costs and benefits except for the value of
CO2 reductions, for which DOE used case-specific discount
rates, as shown in Table I.3. Using the present value, DOE then
calculated the fixed annual payment over a 30-year period, starting
in the compliance year, that yields the same present value.
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Although combining the values of operating savings and
CO2 emission reductions provides a useful perspective, two
issues should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions, whereas the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use different time frames for analysis. The national operating
cost savings is measured for the lifetime of residential dishwashers
shipped in 2019-2048. The SCC values, on the other hand, reflect the
present value of some future climate-related impacts resulting from the
emission of one ton of carbon dioxide in each year. These impacts
continue well beyond 2100.
Estimates of annualized benefits and costs of the proposed
standards are shown in Table I.4. The results under the primary
estimate are as follows. Using a 7-percent discount rate for benefits
and costs other than CO2 reduction, for which DOE used a 3-
percent discount rate along with the average SCC series that has a
value of $40.5/t in 2015, the cost of the standards proposed in today's
rule is $413million per year in increased equipment costs, while the
benefits are $437 million per year in reduced equipment operating
costs, $113 million in CO2 reductions, and $8.37 million in
reduced NOX emissions. In this case, the net benefit amounts
to $146 million per year. Using a 3-percent discount rate for all
benefits and costs and the average SCC series that has a value of
$40.5/t in 2015, the cost of the standards proposed in today's rule is
$406 million per year in increased equipment costs, while the benefits
are $529 million per year in reduced operating costs, $113 million in
CO2 reductions, and $9.95 million in reduced NOX
emissions. In this case, the net benefit amounts to $246 million per
year.
Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Residential Dishwashers
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Million 2013$/year
Discount rate -----------------------------------------------------------------------------------------
Primary estimate * Low net benefits estimate * High net benefits estimate *
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Benefits
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Operating Cost Savings......... 7%........................... 437......................... 388......................... 506.
3%........................... 529......................... 462......................... 624.
CO[ihel2] Reduction Monetized 5%........................... 34.......................... 30.......................... 39.
Value ($12.0/t case)*.
CO[ihel2] Reduction Monetized 3%........................... 113......................... 100......................... 131.
Value ($40.5/t case)*.
CO[ihel2] Reduction Monetized 2.5%......................... 165......................... 146......................... 191.
Value ($62.4/t case)*.
CO[ihel2] Reduction Monetized 3%........................... 351......................... 311......................... 406.
Value ($119/t case)*.
NOX Reduction Monetized Value 7%........................... 8.37........................ 7.53........................ 9.49.
(at $2,684/ton). 3%........................... 9.95........................ 8.86........................ 11.43.
Total Benefits [dagger]........ 7% plus CO[ihel2] range...... 479 to 796.................. 425 to 706.................. 555 to 921.
7%........................... 558......................... 496......................... 647.
3% plus CO[ihel2] range...... 572 to 890.................. 501 to 782.................. 674 to 1,041.
3%........................... 652......................... 572......................... 766.
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Costs
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Consumer Incremental Product 7%........................... 413......................... 468......................... 371.
Costs. 3%........................... 406......................... 465......................... 361.
[[Page 76146]]
Net Benefits
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Total[dagger].................. 7% plus CO[ihel2] range...... 66 to 383................... -43 to 238.................. 183 to 550.
7%........................... 146......................... 28.......................... 275.
3% plus CO[ihel2] range...... 167 to 484.................. 36 to 317................... 313 to 680.
3%........................... 246......................... 106......................... 405.
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* This table presents the annualized costs and benefits associated with residential dishwashers shipped in 2019-2048. These results include benefits to
consumers which accrue after 2048 from the products purchased in 2019-2048. The results account for the incremental variable and fixed costs incurred
by manufacturers due to the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High Benefits
Estimates utilize projections of energy prices from the AEO 2014 Reference case, Low Estimate, and High Estimate, respectively. In addition,
incremental product costs reflect a medium decline rate for projected product prices in the Primary Estimate, a low decline rate for projected product
prices in the Low Benefits Estimate, and a high decline rate for projected product prices in the High Benefits Estimate. The methods used to derive
projected price trends are explained in section IV.H.2 of this notice.
** The CO[ihel2] values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the updated SCC values. The first
three cases use the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The fourth case represents the 95th
percentile of the SCC distribution calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor.
[dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the average SCC with 3-percent discount rate. In the
rows labeled ``7% plus CO[ihel2] range'' and ``3% plus CO[ihel2] range,'' the operating cost and NOX benefits are calculated using the labeled
discount rate, and those values are added to the full range of CO[ihel2] values.
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. DOE further notes that products
achieving these standard levels are already commercially available for
the product classes covered by today's proposal.\12\ See chapter 10,
section 10.2 for more discussion of the base case efficiency
distribution. Based on the analyses described above, DOE has
tentatively concluded that the benefits of the proposed standards to
the nation (energy savings, positive NPV of consumer benefits, consumer
LCC savings, and emission reductions) would outweigh the burdens (loss
of INPV for manufacturers and LCC increases for some consumers).
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\12\ Currently 12.1 percent of the standard product class and
48.1 percent of the compact product class are at the minimum
efficiency level.
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DOE also considered more and less stringent energy efficiency
levels as trial standard levels, and is still considering them in this
rulemaking. However, DOE has tentatively concluded that the proposed
standard level achieves the maximum improvement in energy efficiency
that is technologically feasible and economically justified. Based on
consideration of the public comments DOE receives in response to this
notice and related information collected and analyzed during the course
of this rulemaking effort, DOE may adopt energy efficiency levels
presented in this notice that are either higher or lower than the
proposed standards, or some combination of level(s) that incorporate
the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying today's proposal, as well as some of the relevant historical
background related to the establishment of standards for residential
dishwashers.
A. Authority
Title III, Part B of the Energy Policy and Conservation Act of 1975
(EPCA or the Act), established the Energy Conservation Program for
Consumer Products Other Than Automobiles. Public Law 94-163 (as
codified in 42 U.S.C. 6291-6309). The program covers most major
household appliances (collectively referred to as ``covered
products''), which includes the types of residential dishwashers that
are the subject of this rulemaking. (42 U.S.C. 6292(a)(6)) EPCA
prescribed energy conservation standards for these products (42 U.S.C.
6295(g)(1) and (10)(A)), and directed DOE to conduct further
rulemakings to determine whether to amend these standards. (42 U.S.C.
6295(g)(4) and (10)(B)) In addition, the agency must periodically
review its already established energy conservation standards for a
covered product. (42 U.S.C. 6295(m)) Under this requirement, the next
review that DOE would need to conduct must occur no later than six
years from the issuance of any final rule establishing or amending a
standard for a covered product.
Pursuant to EPCA, DOE's energy conservation program for covered
products consists essentially of four parts: (1) Testing; (2) labeling;
(3) the establishment of Federal energy conservation standards; and (4)
certification and enforcement procedures. The Federal Trade Commission
(FTC) is primarily responsible for labeling, and DOE implements the
remainder of the program. Subject to certain criteria and conditions,
DOE is required to develop test procedures to measure the energy
efficiency, energy use, or estimated annual operating cost of each
covered product. (42 U.S.C. 6293) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use
these test procedures to determine whether the products comply with
standards adopted pursuant to EPCA. Id. The DOE test procedures for
residential dishwashers currently appear at title 10 of the Code of
Federal Regulations (CFR) part 430, subpart B, appendix C1 (appendix
C1).
DOE must follow specific statutory criteria for prescribing amended
standards for covered products. As indicated above, any amended
standard for a covered product must be designed to achieve the maximum
improvement in energy efficiency that is technologically feasible and
[[Page 76147]]
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may
not adopt any standard that would not result in the significant
conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not
prescribe a standard: (1) For certain products, including residential
dishwashers, if no test procedure has been established for the product,
or (2) if DOE determines by rule that the proposed standard is not
technologically feasible or economically justified. (42 U.S.C.
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven factors:
1. The economic impact of the standard on manufacturers and
consumers of the 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 that 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)(I)-(VII))
EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe
an amended or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States of any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Further, EPCA, as codified, establishes a rebuttable presumption
that a standard is economically justified if the Secretary finds that
the additional cost to the consumer of purchasing a product complying
with an energy conservation standard level will be less than three
times the value of the energy savings during the first year that the
consumer will receive as a result of the standard, as calculated under
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
Additionally, EPCA specifies requirements when promulgating a
standard for a type or class of covered product that has two or more
subcategories. (42 U.S.C. 6295(q)(1)) DOE must specify a different
standard level than that which applies generally to such type or class
of products for any group of covered products that have the same
function or intended use if DOE determines that products within such
group (A) consume a different kind of energy from that consumed by
other covered products within such type (or class); or (B) have a
capacity or other performance-related feature which other products
within such type (or class) do not have and such feature justifies a
higher or lower standard. (42 U.S.C. 6294(q)(1)) In determining whether
a performance-related feature justifies a different standard for a
group of products, DOE must consider such factors as the utility to the
consumer of the feature and other factors DOE deems appropriate. Id.
Any rule prescribing such a standard must include an explanation of the
basis on which such higher or lower level was established. (42 U.S.C.
6295(q)(2))
Federal energy conservation requirements generally supersede State
laws or regulations concerning energy conservation testing, labeling,
and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers
of Federal preemption for particular State laws or regulations, in
accordance with the procedures and other provisions set forth under
EPCA. (42 U.S.C. 6297(d))
Any final rule for new or amended energy conservation standards
promulgated after July 1, 2010 must also address standby mode and off
mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE adopts
a standard for a covered product after that date, it must, if justified
by the criteria for adoption of standards under EPCA (42 U.S.C.
6295(o)), incorporate standby mode and off mode energy use into the
standard, or, if that is not feasible, adopt a separate standard for
such energy use for that product. (42 U.S.C. 6295(gg)(3)(A)-(B)) DOE's
current test procedures and standards for residential dishwashers
address standby mode and off mode energy use. In this rulemaking, DOE
intends to incorporate such energy use into any amended energy
conservation standards it adopts in the final rule.
DOE has also reviewed this regulation pursuant to Executive Order
(E.O.) 13563, issued on January 18, 2011. 76 FR 3281 (Jan. 21, 2011).
E.O. 13563 is supplemental to and explicitly reaffirms the principles,
structures, and definitions governing regulatory review established in
E.O. 12866. To the extent permitted by law, agencies are required by
E.O. 13563 to: (1) Propose or adopt a regulation only upon a reasoned
determination that its benefits justify its costs (recognizing that
some benefits and costs are difficult to quantify); (2) tailor
regulations to impose the least burden on society, consistent with
obtaining regulatory objectives, taking into account, among other
things, and to the extent practicable, the costs of cumulative
regulations; (3) select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity); (4) to the extent
feasible, specify performance objectives, rather than specifying the
behavior or manner of compliance that regulated entities must adopt;
and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public.
DOE emphasizes as well that E.O. 13563 requires agencies to use the
best available techniques to quantify anticipated present and future
benefits and costs as accurately as possible. In its guidance, the
Office of Information and Regulatory Affairs has emphasized that such
techniques may include identifying changing future compliance costs
that might result from technological innovation or anticipated
behavioral changes. For the reasons stated in the preamble, DOE
believes that today's NOPR is consistent with these principles,
including the requirement that, to the extent permitted by law,
benefits justify costs and that net benefits are maximized. Consistent
with E.O. 13563, and the range of impacts analyzed in this rulemaking,
the energy efficiency
[[Page 76148]]
standards proposed herein by DOE achieve maximum net benefits.
B. Background
1. Current Standards
In a direct final rule published on May 30, 2012 (hereinafter the
``May 2012 direct final rule''), DOE prescribed the current energy
conservation standards for residential dishwashers manufactured on or
after May 30, 2013. 77 FR 31918. The current standards are set forth in
Table II.1.
Table II.1--Federal Energy Efficiency Standards for Residential
Dishwashers
------------------------------------------------------------------------
Per-cycle water
Product class Annual energy use consumption (gal/
(kWh/year) cycle)
------------------------------------------------------------------------
Standard.......................... 307 5.0
Compact........................... 222 3.5
------------------------------------------------------------------------
2. History of Standards Rulemaking for Residential Dishwashers
The National Appliance Energy Conservation Act of 1987 (NAECA),
Pub. L. 100-12 (March 17, 1989), amended EPCA and required that
residential dishwashers be equipped with an option to dry without heat.
NAECA further required that DOE conduct two cycles of rulemakings to
determine if amended standards are justified. (42 U.S.C. 6295(g)(1) and
(4))
On May 14, 1991, DOE issued a final rule establishing performance
standards for residential dishwashers to complete the first required
rulemaking cycle. 56 FR 22250. Compliance with the new standards,
codified at 10 CFR 430.32(f), was required on May 14, 1994.
DOE then conducted a second standards rulemaking for residential
dishwashers. DOE issued an advance notice of proposed rulemaking
(ANOPR) on November 14, 1994 to consider amending the energy
conservation standards for residential clothes washers, dishwashers,
and clothes dryers. 59 FR 56423. Subsequently, DOE published a Notice
of Availability of the ``Rulemaking Framework for Commercial Clothes
Washers and Residential Dishwashers, Dehumidifiers, and Cooking
Products.'' 71 FR 15059 (Mar. 27, 2006). On November 15, 2007, DOE
published a second ANOPR addressing energy conservation standards for
these products. 72 FR 64432. On December 19, 2007, Congress enacted
EISA 2007, which, among other things, established maximum energy and
water use levels for residential dishwashers manufactured on or after
January 1, 2010. (42 U.S.C. 6295(g)(10)) DOE codified the statutory
standards for these products in a final rule published March 23, 2009.
74 FR 12058.
The current energy conservation standards for residential
dishwashers were submitted to DOE by groups representing manufacturers,
energy and environmental advocates, and consumer groups on September
25, 2010. This collective set of comments, titled ``Agreement on
Minimum Federal Efficiency Standards, Smart Appliances, Federal
Incentives and Related Matters for Specified Appliances'' (the ``Joint
Petition'' \13\), recommended specific energy conservation standards
for residential dishwashers that, in the commenters' view, would
satisfy the EPCA requirements. (42 U.S.C. 6295(o)) DOE conducted its
rulemaking analyses on multiple residential dishwasher efficiency
levels, including those suggested in the Joint Petition. In the May
2012 direct final rule, DOE established energy conservation standards
for residential dishwashers manufactured on or after May 30, 2013,
consistent with the levels suggested in the Joint Petition. 77 FR 31918
(May 30, 2012).
---------------------------------------------------------------------------
\13\ DOE Docket No. EERE-2011-BT-STD-0060, Comment 1.
---------------------------------------------------------------------------
DOE is conducting the current energy conservation standards
rulemaking pursuant to 42 U.S.C. 6295(m), which requires that within 6
years of issuing any final rule establishing or amending a standard,
DOE shall publish either a notice of determination that amended
standards are not needed or a NOPR including new proposed standards.
Because the current standards were established in the final rule issued
on May 12, 2012, publication of this notice within the 6-year timeframe
satisfies these requirements. The rulemaking will consider any
information not available at the time of the May 2012 direct final
rule. The definition of the TSLs considered in this NOPR is discussed
in section V.A of this notice.
3. Residential Dishwasher Test Procedure History
DOE originally established its test procedure for residential
dishwashers at Title 10 of CFR, part 430, subpart B, appendix C
(appendix C) in 1977. 42 FR 39964 (Aug. 8, 1977). In 1983, DOE amended
the test procedure to revise the representative average-use cycles to
more accurately reflect consumer use and to address products that use
120 degrees Fahrenheit ([deg]F) inlet water. 48 FR 9202 (Mar. 3, 1983).
DOE amended the test procedure again in 1984 to redefine the term
``water heating dishwasher.'' 49 FR 46533 (Nov. 27, 1984). In 1987, DOE
amended the test procedure to address models that use 50[deg]F inlet
water. 52 FR 47549 (Dec. 15, 1987).
In 2001, DOE revised the test procedure's testing specifications to
improve testing repeatability, changed the definitions of ``compact
dishwasher'' and ``standard dishwasher,'' and reduced the average
number of use cycles per year from 322 to 264. 66 FR 65091, 65095-97
(Dec. 18, 2001).
In 2003, DOE again revised the test procedure to more accurately
measure residential dishwasher efficiency, energy use, and water use.
The 2003 residential dishwasher test procedure amendments included the
following revisions: (1) The addition of a method to rate the
efficiency of soil-sensing products; (2) the addition of a method to
measure standby power; and (3) a reduction in the average-use cycles
per year from 264 to 215. 68 FR 51887, 51899-903 (Aug. 29, 2003).
In 2012, DOE established a new test procedure for residential
dishwashers in appendix C1. Appendix C1 follows the same general
procedures as those included in the previously used appendix C, with
updates to: (1) Revise the provisions for measuring energy consumption
in standby mode or off mode; (2) add requirements for residential
dishwashers with water softeners to account for regeneration cycles;
(3) require an additional preconditioning cycle; (4) include
clarifications regarding certain definitions, test conditions, and test
setup; and (5) replace obsolete test load items and soils. 77 FR 65942,
65982-65987 (Oct. 31, 2012).
[[Page 76149]]
The current version of the test procedure at 10 CFR 430.23(c)
includes provisions for determining estimated annual energy use (EAEU),
estimated annual operating cost (EAOC), and water consumption expressed
in gal/cycle. Because appendix C is now obsolete, DOE proposes to
delete it in this rulemaking and re-designate appendix C1 as appendix
C.
III. General Discussion
A. Product Classes and Scope of Coverage
When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that
justifies a different standard. In making a determination whether a
performance-related feature justifies a different standard, DOE must
consider such factors as the utility to the consumer of the feature and
other factors DOE determines are appropriate. (42 U.S.C. 6295(q))
Existing energy conservation standards divide residential
dishwashers into two product classes based on capacity (i.e., the
number of place settings and serving pieces that can be loaded in the
product as specified in American National Standards Institute (ANSI)/
Association of Home Appliance Manufacturers (AHAM) Standard DW-1-2010,
Household Electric Dishwashers):
Standard (capacity equal to or greater than eight place
settings plus six serving pieces); and
Compact (capacity less than eight place settings plus six
serving pieces).
In this NOPR, DOE proposes to maintain the existing standard and
compact product classes for residential dishwashers. Based on a survey
of products available on the market, DOE determined that compact
residential dishwashers provide unique utility by means of their
countertop or drawer configurations.
B. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and working prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
rulemaking. As the first step in such an analysis, DOE develops a list
of technology options for consideration in consultation with
manufacturers, design engineers, and other interested parties. DOE then
determines which of those means for improving efficiency are
technologically feasible. As defined in 10 CFR part 430, subpart C,
appendix A, section 4(a)(4)(i), DOE considers technologies incorporated
in commercially available products or in working prototypes to be
technologically feasible.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
Practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; and (3) adverse impacts on
health or safety. 10 CFR part 430, subpart C, appendix A, section
4(a)(4)(ii)-(iv). Section IV.B of this NOPR discusses the results of
the screening analysis for residential dishwashers, particularly the
designs DOE considered, those it screened out, and those that are the
basis for the TSLs in this rulemaking. For further details on the
screening analysis for this rulemaking, see chapter 4 of the NOPR
Technical Support Document (TSD).
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for
residential dishwashers, using the design parameters for the most
efficient products available on the market or in working prototypes.
(See chapter 5 of the NOPR TSD.) The max-tech levels that DOE
determined for this rulemaking are described in section IV.C.1.b of
this proposed rule.
C. Energy Savings
1. Determination of Savings
For each TSL, DOE projected energy savings from the residential
dishwashers that are the subject of this rulemaking purchased in the
30-year period that begins in the expected year of compliance with any
amended standards (2019-2048).\14\ The savings are measured over the
entire lifetime of residential dishwashers purchased in the 30-year
analysis period.\15\ DOE quantified the energy savings attributable to
each TSL as the difference in energy consumption between each standards
case and the base case. The base case represents a projection of energy
consumption in the absence of amended mandatory efficiency standards,
and it considers market forces and policies that affect demand for more
efficient products.
---------------------------------------------------------------------------
\14\ DOE also presents a sensitivity analysis that considers
impacts for products shipped in a 9-year period.
\15\ In the past, DOE presented energy savings results for only
the 30-year period that begins in the year of compliance. In the
calculation of economic impacts, however, DOE considered operating
cost savings measured over the entire lifetime of products purchased
in the 30-year period. DOE has modified its presentation of national
energy savings consistent with the approach used for its national
economic analysis.
---------------------------------------------------------------------------
DOE used its national impact analysis (NIA) spreadsheet model to
estimate energy savings from amended standards for the products that
are the subject of this rulemaking. The NIA spreadsheet model
(described in section IV.H of this NOPR) calculates energy savings in
site energy, which is the energy directly consumed by products at the
locations where they are used. For electricity, DOE reports national
energy savings in terms of the savings in the energy that is used to
generate and transmit the site electricity. To calculate this quantity,
DOE derives annual conversion factors from the model used to prepare
the Energy Information Administration's (EIA) most recent Annual Energy
Outlook (AEO). The AEO used for this rulemaking is AEO 2014.
DOE has begun to also estimate full-fuel-cycle (FFC) energy
savings, as discussed in DOE's statement of policy and notice of policy
amendment. 76 FR 51281 (Aug. 18, 2011), as amended at 77 FR 49701 (Aug.
17, 2012). The FFC metric includes the energy consumed in extracting,
processing, and transporting primary fuels (i.e., coal, natural gas,
petroleum fuels), and thus presents a more complete picture of the
impacts of energy efficiency standards. DOE's evaluation of FFC savings
resulted in part by the National Academy of Science's (NAS) report on
FFC measurement approaches for DOE's Appliance Standards Program.\16\
The FFC methodology estimates how much additional energy, and in turn
how many tons of emissions, may be displaced if the estimated quantity
of energy was not consumed by the residential dishwashers covered in
this rulemaking. For more information on
[[Page 76150]]
FFC energy savings, see section IV.H.1 of this NOPR.
---------------------------------------------------------------------------
\16\ ``Review of Site (Point-of-Use) and Full-Fuel-Cycle
Measurement Approaches to DOE/EERE Building Appliance Energy-
Efficiency Standards,'' (Academy report) was completed in May 2009
and included five recommendations. A copy of the study can be
downloaded at: http://www.nap.edu/catalog.php?record_id=12670.
---------------------------------------------------------------------------
2. Significance of Savings
To adopt more-stringent standards for a covered product, DOE must
determine that such action would result in ``significant'' energy
savings. (42 U.S.C. 6295(o)(3)(B)) Although the term ``significant'' is
not defined in the Act, the U.S. Court of Appeals, in Natural Resources
Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985),
indicated that Congress intended ``significant'' energy savings in the
context of EPCA to be savings that were not ``genuinely trivial.'' The
energy savings for today's proposed standards (presented in section
V.B.3.a of this notice) are nontrivial, and, therefore, DOE considers
them ``significant'' within the meaning of section 325 of EPCA.
D. Economic Justification
1. Specific Criteria
EPCA provides seven factors to be evaluated in determining whether
a potential energy conservation standard is economically justified. (42
U.S.C. 6295(o)(2)(B)(i)) The following sections discuss how DOE has
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts a manufacturer impact analysis (MIA), as
discussed in section IV.J of this notice. DOE first uses an annual
cash-flow approach to determine the quantitative impacts. This step
includes both a short-term assessment--based on the cost and capital
requirements during the period between when a regulation is issued and
when entities must comply with the regulation--and a long-term
assessment over a 30-year period. The industry-wide impacts analyzed
include INPV, which values the industry on the basis of expected future
cash flows; cash flows by year; changes in revenue and income; and
other measures of impact, as appropriate. Second, DOE analyzes and
reports the impacts on different types of manufacturers, including
impacts on small manufacturers. Third, DOE considers the impact of
standards on domestic manufacturer employment and manufacturing
capacity, as well as the potential for standards to result in plant
closures and loss of capital investment. Finally, DOE takes into
account cumulative impacts of various DOE regulations and other
regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the economic impacts applicable to a particular rulemaking. DOE also
evaluates the LCC impacts of potential standards on identifiable
subgroups of consumers that may be affected disproportionately by a
national standard.
a. Savings in Operating Costs Compared To Increase in Price
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product compared
to any increases in the price of the covered product that are likely to
result from the imposition of the standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value. For
its analysis, DOE assumes that consumers will purchase the covered
products in the first year of compliance with amended standards.
The LCC savings for the considered efficiency levels are calculated
relative to a base case that reflects projected market trends in the
absence of amended standards. DOE's LCC and PBP analysis is discussed
in further detail in section IV.F of this NOPR.
b. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section IV.H.1 of this NOPR, DOE uses the NIA spreadsheet
to project national energy savings.
c. Lessening of Utility or Performance of Products
In establishing classes of products, and in evaluating design
options and the impact of potential standard levels, DOE evaluates
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
from internal testing and the availability of products on the market,
DOE has determined that the standards proposed in this NOPR would not
reduce the utility or performance of the products under consideration
in this rulemaking.
d. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (DOJ) provide its determination on this issue. DOE will address
the Attorney General's determination in the final rule.
e. Need for National Energy Conservation
In evaluating the need for national energy conservation, DOE
expects that the energy savings from the proposed standards are likely
to provide improvements to the security and reliability of the nation's
energy system. Reductions in the demand for electricity also may result
in reduced costs for maintaining the reliability of the nation's
electricity system. DOE conducts a utility impact analysis to estimate
how standards may affect the nation's needed power generation capacity.
The proposed standards also are likely to result in environmental
benefits in the form of reduced emissions of air pollutants and
greenhouse gases associated with energy production. DOE reports the
emissions impacts from today's standards, and from each TSL it
considered, in section V.B.6 of this NOPR. DOE also reports estimates
of the economic value of emissions reductions resulting from the
considered TSLs, as discussed in section IV.L of this NOPR.
f. Other Factors
EPCA allows the Secretary of Energy, in determining whether a
standard is economically justified, to consider any other factors that
the Secretary deems to
[[Page 76151]]
be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
2. Rebuttable Presumption
EPCA creates a rebuttable presumption that an energy conservation
standard is economically justified if the additional cost to the
consumer of a product that meets the standard is less than three times
the value of the first year's savings in energy (and water, if
applicable) resulting from the standard, as calculated under the
applicable DOE test procedure. (42 U.S.C. 6295(o)(2)(B)(iii)) DOE's LCC
and PBP analyses generate values used to calculate the effects that
proposed energy conservation standards would have on the payback period
for consumers. These analyses include, but are not limited to, the 3-
year payback period contemplated under the rebuttable-presumption test.
In addition, DOE routinely conducts the required economic analysis that
considers the full range of impacts to consumers, manufacturers, the
nation, and the environment. (42 U.S.C. 6295(o)(2)(B)(i)) The results
of this analysis serve as the basis for DOE's evaluation of the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). The rebuttable presumption payback calculation
is discussed in section IV.F.11 of this proposed rule.
IV. Methodology and Discussion
DOE used two spreadsheet tools to estimate the impact of this NOPR.
The first spreadsheet calculates LCCs and PBPs of potential new energy
conservation standards. The second provides shipments forecasts and
then calculates impacts of potential energy efficiency standards on
national energy savings and net present value. The two spreadsheets are
available online at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=106. The Department also
assessed manufacturer impacts, largely through use of the Government
Regulatory Impact Model (GRIM).
Additionally, DOE estimated the impacts on utilities and the
environment of energy conservation standards for residential
dishwashers. DOE used a version of EIA's National Energy Modeling
System (NEMS) for the utility and environmental analyses. The NEMS
model simulates the energy sector of the U.S. economy. EIA uses NEMS to
prepare its Annual Energy Outlook, a widely known baseline energy
forecast for the United States. For more information on NEMS, refer to
The National Energy Modeling System: An Overview, DOE/EIA-0581 (98)
(Feb.1998), available at: http://www.eia.gov/oiaf/aeo/overview/.
The version of NEMS used for appliance standards analysis, which
makes minor modifications to the AEO version, is called NEMS-BT.\17\
NEMS-BT accounts for the interactions among the various energy supply
and demand sectors and the economy as a whole.
---------------------------------------------------------------------------
\17\ EIA approves the use of the name ``NEMS'' to describe only
an AEO version of the model without any modification to code or
data. Because the present analysis entails some minor code
modifications and runs the model under various policy scenarios that
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the
model as used here. (BT stands for DOE's Building Technologies
Program.)
---------------------------------------------------------------------------
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this residential dishwasher rulemaking include: (1)
Scope and product classes; (2) manufacturers and industry structure;
(3) existing efficiency programs; (4) shipments information; (5) market
and industry trends; and (6) technologies that could improve the energy
efficiency of residential dishwashers. The key findings of DOE's market
assessment are summarized below. See chapter 3 of the NOPR TSD for
further discussion of the market and technology assessment.
1. Scope and Product Classes
In 10 CFR 430.2, DOE defines dishwasher as ``a cabinet-like
appliance which with the aid of water and detergent, washes, rinses,
and dries (when a drying process is included) dishware, glassware,
eating utensils, and most cooking utensils by chemical, mechanical and/
or electrical means and discharges to the plumbing drainage system.''
When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that justify
a different standard. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such
factors as the utility to the consumer of the feature and other factors
DOE determines are appropriate. (42 U.S.C. 6295(q)) For this
rulemaking, DOE proposes to maintain the scope of coverage as defined
by its current regulations for residential dishwashers, which include
two product classes based on capacity as specified in ANSI/AHAM
Standard DW-1-2010:
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).
2. Technology Options
DOE identified 16 technology options that would be expected to
improve the efficiency of residential dishwashers: condensation drying;
control strategies; fan or jet drying; flow-through heating; improved
fill control; finer filters; increased motor efficiency; optimized
spray-arm geometry; increased insulation; low standby-loss electronic
controls; microprocessor controls (including soil-sensing controls);
modified sump geometry, with and without dual pumps; reduced inlet
water temperature; supercritical carbon dioxide washing; ultrasonic
washing; and variable washing pressures and flow rates.
After identifying all potential technology options for improving
the efficiency of residential dishwashers, DOE performed the screening
analysis (see section IV.B of this notice and chapter 4 of the NOPR
TSD) on these technologies to determine which to consider further in
the analysis and which to eliminate.
B. Screening Analysis
DOE uses the following four screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
1. Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will not
be considered further.
2. Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and servicing
of a technology in commercial products could not be achieved on the
scale necessary to serve the relevant market at the time of the
compliance date of the standard, then that technology will not be
considered further.
3. Impacts on product utility or product availability. If it is
determined that a technology would have significant
[[Page 76152]]
adverse impact on the utility of the product to significant subgroups
of consumers or would result in the unavailability of any covered
product type with performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as products generally available in the United States at the time,
it will not be considered further.
4. Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
10 CFR part 430, subpart C, appendix A, 4(a)(4) and 5(b).
In sum, if DOE determines that a technology, or a combination of
technologies, fails to meet one or more of the above four criteria, it
will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed
below.
1. Screened-Out Technologies
Reduced Inlet-Water Temperature
Reduced inlet-water temperature requires that residential
dishwashers tap the cold water line for their water supply. Because
most residential dishwashers in the United States tap the hot water
line, this design option would require significant alteration of
existing residential dishwasher installations to accommodate newly
purchased units incorporating this design option. Therefore, DOE
believes that it would not be practicable to install this technology on
the scale necessary to serve the relevant market at the time of the
effective date of an amended standard.
Supercritical Carbon Dioxide Washing
Supercritical carbon dioxide washing, which uses supercritical
carbon dioxide instead of conventional detergent and water to wash
dishes, has been researched but has not been implemented in
commercially available dishwashers. Thus, DOE believes that it would
not be practicable to manufacture, install and service this technology
on the scale necessary to serve the relevant market at the time of the
effective date of an amended standard. Furthermore, because this
technology has not progressed beyond the research stage, it is not yet
possible to assess whether it will have any adverse impacts on
equipment utility to consumers or equipment availability, or any
adverse impacts on consumers' health or safety.
Ultrasonic Washing
A residential dishwasher using ultrasonic waves to generate a
cleaning mist was produced for the Japanese market in 2002. However,
this model is no longer available on the market. Available information
indicates that the use of a mist with ion generation instead of water
with detergent would decrease cleaning performance, impacting consumer
utility.
Ultrasonic dishwashing based upon soiled-dish immersion in a fluid
that is then excited by ultrasonic waves has not been demonstrated. In
an immersion-based ultrasonic dishwasher, standing ultrasonic waves
within the washing cavity and the force of bubble cavitation implosion
can damage fragile dishware. Because no manufacturers currently produce
ultrasonic dishwashers, it is impossible to assess whether this design
option would have any impacts on consumers' health or safety, or
product availability.
2. Remaining Technologies
Through a review of each technology, DOE found that all of the
other identified technologies met all four screening criteria to be
examined further in DOE's analysis. In summary, DOE did not screen out
the following technology options: condensation drying; control
strategies; fan or jet drying; flow-through heating; improved fill
control; finer filters; increased motor efficiency; optimized spray-arm
geometry; increased insulation; low standby-loss electronic controls;
microprocessor controls (including soil-sensing controls); modified
sump geometry, with and without dual pumps; and variable washing
pressures and flow rates.
All of these technology options are technologically feasible, given
that the evaluated technologies are being used in commercially
available products or working prototypes. Therefore, all of the energy
conservation levels evaluated in this notice are technologically
feasible. DOE also finds that all of the remaining technology options
also meet the other screening criteria (i.e., practicable to
manufacture, install, and service and do not result in adverse impacts
on consumer utility, product availability, health, or safety). For
additional details, see chapter 4 of the NOPR TSD.
C. Engineering Analysis
In the engineering analysis DOE establishes the relationship
between the manufacturer production cost (MPC) and improved residential
dishwasher efficiency. This relationship serves as the basis for cost-
benefit calculations for individual consumers, manufacturers, and the
nation. DOE typically structures the engineering analysis using one of
three approaches: (1) Design option; (2) efficiency level; or (3)
reverse engineering (or cost assessment). The design-option approach
involves adding the estimated cost and associated efficiency of various
efficiency-improving design changes to the baseline to model different
levels of efficiency. The efficiency-level approach uses estimates of
costs and efficiencies of products available on the market at distinct
efficiency levels to develop the cost-efficiency relationship. The
reverse-engineering approach involves testing products for efficiency
and determining cost from a detailed bill of materials (BOM) derived
from reverse engineering representative products.
For this analysis, DOE relied on a hybrid approach of the three
methods. DOE selected units available at each of the analyzed
efficiency levels to develop a detailed BOM for each product, similar
to the reverse-engineering approach. However, DOE did not assume the
costs derived from the BOMs represented the MPC at each efficiency
level. DOE used the design option approach to add features that can
improve efficiency to the baseline BOM to estimate the MPC at higher
efficiency levels, similar to the design-option approach. For
residential dishwashers, it is difficult to assign a specific energy or
water savings to a particular design option. DOE observed the sets of
design options incorporated into units available on the market at each
efficiency level to assign design options to each of the analyzed
efficiency levels, similar to the efficiency-level approach. Using this
hybrid approach, DOE developed the relationship between MPC and
residential dishwasher efficiency.
This section provides more detail on how DOE selected the
efficiency levels used for its analysis and developed the MPC at each
efficiency level. Chapter 5 of the NOPR TSD contains further
description of the engineering analysis.
1. Efficiency Levels
a. Baseline Efficiency Levels
A baseline unit is a unit that just meets current Federal energy
conservation standards and provides basic consumer utility.\18\ DOE
identified products available on the market rated at the current energy
conservation standards levels (see Table IV.1 below). Accordingly, DOE
analyzed these
[[Page 76153]]
products as baseline units. DOE uses the baseline unit for comparison
in several phases of the NOPR analyses, including the engineering
analysis, LCC analysis, PBP analysis, and NIA. To determine energy
savings that will result from an amended energy conservation standard,
DOE compares energy use at each of the higher energy efficiency levels
to the energy consumption of the baseline unit. Similarly, to determine
the changes in price to the consumer that will result from an amended
energy conservation standard, DOE compares the price of a unit at each
higher efficiency level to the price of a unit at the baseline.
Additional details on the selection of baseline units may be found in
chapter 5 of the NOPR TSD.
---------------------------------------------------------------------------
\18\ The current Federal energy conservation standards went into
effect on May 30, 2013.
---------------------------------------------------------------------------
Table IV.1 presents the baseline levels identified for each
residential dishwasher product class.
Table IV.1--Baseline Efficiency Levels
------------------------------------------------------------------------
Per-cycle
Annual water
Product class energy use consumption
(kWh/year) (gal/
cycle)
------------------------------------------------------------------------
Standard...................................... 307 5.0
Compact....................................... 222 3.5
------------------------------------------------------------------------
b. Higher Energy Efficiency Levels
Table IV.2 shows the efficiency levels DOE selected for standard
residential dishwashers in this NOPR analysis.
Table IV.2--Residential Dishwasher Efficiency Levels--Standard Product
Class
------------------------------------------------------------------------
Per-cycle
Annual water
Efficiency level energy use consumption
(kWh/year) (gal/
cycle)
------------------------------------------------------------------------
0_Baseline.................................... 307 5.00
1............................................. 295 4.25
2............................................. 280 3.50
3............................................. 234 3.10
4_Max-Tech.................................... 180 2.22
------------------------------------------------------------------------
For standard residential dishwashers, DOE selected efficiency
levels according to key levels identified in other efficiency programs
and based on availability of products on the market. Efficiency Level 1
corresponds to the existing ENERGY STAR \19\ criteria for standard
residential dishwashers. Efficiency Level 2 corresponds to potential
ENERGY STAR criteria identified during the process of setting the
current ENERGY STAR criteria. This level was included in the Draft 2
V5.0 Dishwashers Specification, released on February 3, 2011.\20\
Efficiency Level 3 is a gap-fill level developed as described below.
Efficiency Level 4 is the max-tech efficiency level, as defined by the
maximum available technology that DOE identified on the market at the
time of its analysis. DOE did not identify any working prototypes that
were more efficient than this maximum available technology.\21\
---------------------------------------------------------------------------
\19\ Information on the ENERGY STAR program can be found at
energystar.gov.
\20\ The draft specification document is available at https://www.energystar.gov/products/specs/sites/products/files/ES_Draft_2_V5.0_Dishwashers_Specification.pdf. DOE notes that this
level was removed from the Final V5.0 Dishwashers Specification, and
subsequent specification versions 5.1 and 5.2; however, the energy
and water consumption represent a technically feasible efficiency
level beyond the current ENERGY STAR criteria.
\21\ DOE notes that a standard residential dishwasher is
available with rated annual energy consumption of 171 kWh/year and
water consumption of 4.1 gal/cycle. These ratings are based on a
cold-water connection, which DOE eliminated from consideration as a
technology option in the screening analysis.
---------------------------------------------------------------------------
To determine the appropriate Efficiency Level 3, DOE surveyed the
products currently available on the market in the United States. DOE's
Compliance Certification Database \22\ contains standard residential
dishwasher models with a range of rated annual energy consumption and
per-cycle water consumption between the max-tech and baseline. However,
after removing products certified using a cold-water connection, which
DOE screened out as a technology option as discussed in section IV.B of
this NOPR, DOE observed that very few products are available with rated
annual energy consumption below 234 kWh/year and per-cycle water
consumption below 3.1 gal/cycle. Figure IV.1 shows the distribution of
standard residential dishwashers included in DOE's Compliance
Certification Database, after removing models certified using a cold-
water connection. DOE developed efficiency level 3 based on this
distribution.
---------------------------------------------------------------------------
\22\ DOE's Compliance Certification Database is accessible at
http://www.regulations.doe.gov/certification-data/.
\23\ Units certified using a cold-water connection removed.
Database accessed on May 22, 2014.
---------------------------------------------------------------------------
[[Page 76154]]
[GRAPHIC] [TIFF OMITTED] TP19DE14.004
Table IV.3 shows the efficiency levels DOE considered for compact
residential dishwashers in this NOPR analysis.
Table IV.3--Residential Dishwasher Efficiency Levels--Compact Product
Class
------------------------------------------------------------------------
Per-cycle
Annual energy water
Efficiency Level use (kWh/year) consumption
(gal/cycle)
------------------------------------------------------------------------
0_Baseline.............................. 222 3.50
1....................................... 203 3.10
2_Max-Tech.............................. 141 2.00
------------------------------------------------------------------------
Based on basic model numbers listed in DOE's Compliance
Certification Database, DOE expects that fewer than 10 individual
compact basic models are currently available on the market. The
majority of models included in the Compliance Certification Database
are also rated either at the baseline or max-tech efficiency level. In
the ENERGY STAR Draft 2 Version 6.0 Residential Dishwasher
Specification \24\, however, the Environmental Protection Agency
proposed eligibility criteria for compact residential dishwashers
consistent with Efficiency Level 1 shown in Table IV.3. As part of its
proposal, ENERGY STAR discussed feasible energy and water improvements
for compact products with manufacturers. ENERGY STAR's supporting
analysis included the expected design options manufacturers would use
to reach this intermediate efficiency level. Accordingly, DOE
considered the proposed compact ENERGY STAR criteria as an efficiency
level in this analysis. Efficiency Level 2 is the maximum available
efficiency level, as defined by the maximum available technology that
DOE could identify on the market at the time of its analysis. DOE did
not identify any working prototypes that were more efficient than the
maximum available technology.
---------------------------------------------------------------------------
\24\ Information on the ENERGY STAR specification is available
at: https://www.energystar.gov/products/specs/residential_dishwasher_specification_version_6_0_pd.
---------------------------------------------------------------------------
2. Manufacturer Production Cost Estimates
Based on product teardowns and cost modeling, DOE developed overall
cost-efficiency relationships for the standard and compact residential
dishwasher product classes. DOE selected products covering the range of
efficiencies available on the market for the teardown analysis. During
the teardown process, DOE created detailed BOMs that included all
components and processes used to manufacture the products. DOE used the
BOMs from the teardowns as an input to a cost model, which was used to
calculate the MPC for each product torn down.
As discussed earlier in this section, DOE used a hybrid approach of
the design-option, efficiency-level, and reverse-engineering approaches
in this engineering analysis. During the teardown process, DOE observed
the combinations of design options manufacturers used to reach higher
efficiency levels. Using the BOMs from the products torn down, DOE
constructed typical BOMs for each efficiency level to estimate the MPC
based on the expected combinations of design options at each efficiency
level. Table IV.4 and Table IV.5 show the incremental MPCs for each of
the analyzed residential dishwasher efficiency levels compared to the
baseline efficiency level MPC. For additional details, see chapter 5 of
the NOPR TSD.
Table IV.4--Cost-Efficiency Relationship for Standard Residential Dishwashers
----------------------------------------------------------------------------------------------------------------
Per-cycle Incremental
Annual energy water manufacturer
Efficiency level use (kWh/year) consumption production
(gal/cycle) cost (2013$)
----------------------------------------------------------------------------------------------------------------
0_Baseline...................................................... 307 5.00 $ -
[[Page 76155]]
1............................................................... 295 4.25 $ 9.52
2............................................................... 280 3.50 $ 36.53
3............................................................... 234 3.10 $ 74.72
4_Max-Tech...................................................... 180 2.22 $ 74.72
----------------------------------------------------------------------------------------------------------------
Table IV.5--Cost-Efficiency Relationship for Compact Residential Dishwashers
----------------------------------------------------------------------------------------------------------------
Per-Cycle Incremental
Annual energy Water manufacturer
Efficiency level use (kWh/year) Consumption production
(gal/cycle) cost (2013$)
----------------------------------------------------------------------------------------------------------------
0_Baseline...................................................... 222 3.50 $ -
1............................................................... 203 3.10 $ 8.01
2_Max-Tech...................................................... 141 2.00 $ 21.50
----------------------------------------------------------------------------------------------------------------
D. Markups Analysis
The markups analysis develops appropriate markups in the
distribution chain to convert the MPC estimates derived in the
engineering analysis to consumer prices. At each step in the
distribution channel, companies mark up the price of the product to
cover business costs and profit margin. For residential dishwashers,
the main parties in the distribution chain are manufacturers and
retailers.
The manufacturer markup converts MPC to manufacturer selling price
(MSP). DOE developed an average manufacturer markup by examining the
annual Securities and Exchange Commission (SEC) 10-K reports filed by
publicly traded manufacturers primarily engaged in appliance
manufacturing and whose combined product range includes residential
dishwashers.
For retailers, DOE developed separate markups for baseline products
(baseline markups) and for the incremental cost of more efficient
products (incremental markups). Incremental markups are coefficients
that relate the change in the MSP of higher-efficiency models to the
change in the retailer sales price. DOE relied on economic data from
the U.S. Census Bureau to estimate average baseline and incremental
markups.\25\
---------------------------------------------------------------------------
\25\ U.S. Census, 2007 Annual Retail Trade Survey (ARTS),
Electronics and Appliance Stores sectors.
---------------------------------------------------------------------------
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for residential dishwashers.
E. Energy and Water Use Analysis
DOE's energy and water use analysis estimated the range of energy
and water use of residential dishwashers in the field, i.e., as they
are actually used by consumers. The energy and water use analysis
provided the basis for other analyses DOE performed, particularly
assessments of the energy and water savings and the savings in consumer
operating costs that could result from DOE's adoption of amended
standards.
DOE determined a range of annual energy use and per-cycle water
consumption of residential dishwashers by multiplying the per-cycle
energy use and per-cycle water use of each considered design by the
number of cycles per year in a representative sample of U.S.
households.\26\
---------------------------------------------------------------------------
\26\ For the dishwasher standards rulemaking, DOE estimated
consumer usage (cycles per year) to establish dishwasher annual
energy use within the life-cycle cost (LCC) and payback period (PBP)
analysis. To estimate average dishwasher usage, DOE utilized a 2001
Arthur D. Little (ADL) report that focused solely on dishwashers.
Information from the ADL report was used to determine an average
usage of 215 cycles per year. DOE used the Residential Energy
Consumption Survey 2009 (RECS 2009) to characterize household
variability of dishwasher usage.
---------------------------------------------------------------------------
DOE analyzed per-cycle energy consumption based on two components:
(1) Water-heating energy, and (2) machine (motor) and drying energy,
values for which are taken from data developed by DOE in the
engineering analysis. See chapter 5 of the NOPR TSD for more
information. The largest component of residential dishwasher energy
consumption is water-heating energy use, which is the energy required
to heat the inlet water to the temperature for dishwashing. The machine
energy consists of the motor energy (for water pumping and food
disposal), and drying energy consists of heat to dry cleaned dishes.
DOE estimated the per-cycle water-heating energy consumption based
on DOE's residential dishwasher test procedure (which refers to this
quantity as ``water energy consumption''). DOE estimated this energy
consumption for residential dishwashers that operate with a nominal
inlet water temperature of 120 [deg]F \27\, the most common situation
in U.S. homes. For a residential dishwasher using electrically heated
water, the water-heating energy consumption, expressed in kWh per
cycle, is equal to the water consumption per cycle times a nominal
water heater temperature rise of 70 [deg]F times the specific heat of
water (0.0024 kWh per gallon per [deg]F).\28\ For a residential
dishwasher using gas-heated or oil-heated water, the calculation is the
same, but also incorporates a nominal water heater recovery efficiency
of 0.80 for gas-fired water heating and 0.78 for oil-fired water
heating.\29\
---------------------------------------------------------------------------
\27\ Energy Conservation Program: Test Procedures for
Residential Dishwashers, Dehumidifiers, and Conventional Cooking
Products. Available at https://www.federalregister.gov/articles/2012/05/25/2012-11155/energy-conservation-program-test-procedures-for-residential-dishwashers-dehumidifiers-and#h-58.
\28\ The water heater temperature rise of 70 [deg]F assumes an
average water heater inlet temperature of 50 [deg]F, as specified as
the national average in the dishwasher test procedure.
\29\ The recovery efficiency indicates how efficient a water
heater is at heating water. The DOE test procedure for dishwashers
specifies a recovery efficiency of 0.80 for gas-fired water heating
and 0.78 for oil-fired water heating, which is representative of gas
and oil water heaters currently in the housing stock.
---------------------------------------------------------------------------
The energy used to operate the machine powers the motor (to pump
water and dispose of food) and the heating element, which boosts the
supplied water's temperature to the
[[Page 76156]]
required washing temperature. DOE estimated the per-cycle machine and
drying energy consumption for representative units at each efficiency
level by subtracting the per-cycle water-heating energy consumption
from the per-cycle dishwasher energy consumption as determined in the
engineering analysis.
Standby power is defined as a product's minimum power consumption
while plugged in and not performing any active mode function.\30\ DOE
estimated the per-cycle energy use by subtracting the annual energy use
associated with standby power from the total annual energy use and
dividing the result by the national average number of residential
dishwasher cycles per year. DOE used data provided by AHAM for the May
2012 direct final rule on the total annual residential dishwasher
energy use and the standby power use for each considered efficiency
level.\31\
---------------------------------------------------------------------------
\30\ Active mode includes the main functions of washing,
rinsing, or drying (when a drying process is included), or is
involved in functions necessary for these main functions, such as
admitting water into the dishwasher, pumping water out of the
dishwasher, circulating air, or regenerating an internal water
softener. For more information, see the DOE dishwasher test
procedure at 10 CFR part 430, subpart B, appendix C1.
\31\ For more information, see chapter 7 of the NOPR TSD.
---------------------------------------------------------------------------
DOE determined the standby annual energy consumption by multiplying
the energy use in standby mode per hour by the hours the residential
dishwasher is in standby mode, which is the difference between the
number of hours in a year and the active hours, which is equal to the
number of residential dishwasher cycles per year multiplied by cycle
time, which is estimated to be 1 hour.\32\
---------------------------------------------------------------------------
\32\ The 1-hour cycle time is an estimate of the typical cycle
time for a dishwasher. Actual cycle times vary based on wash
selection, load, and model of dishwasher.
---------------------------------------------------------------------------
DOE estimated the per-cycle water use by efficiency level in its
engineering analysis, as described in chapter 5 of the NOPR TSD.
To estimate the number of cycles per year in a representative
sample of U.S. households, DOE considered the following data sources.
DOE analyzed data from the Energy Information Administration (EIA)'s
2009 Residential Energy Consumption Survey (RECS 2009), which was the
most recent such survey available at the time of DOE's analysis.\33\
RECS is a national sample survey of housing units that collects
statistical information on the consumption of and expenditures for
energy in housing units along with data on energy-related
characteristics of the housing units and occupants. Of the more than
12,000 households in RECS, almost 7,400 have residential dishwashers.
For each household using a residential dishwasher, RECS provides data
on the number of residential dishwasher cycles in the following bins:
(1) Less than once per week, (2) once per week, (3) 2-3 times per week,
(4) 4-6 times per week, (5) at least once per day. DOE converted the
above information to annual values and created a triangular or uniform
distribution for each bin. DOE randomly assigned a specific numerical
value from within the appropriate bin to each household in the
residential dishwasher sample. The average number of cycles per year
derived from the RECS 2009 data is 171.
---------------------------------------------------------------------------
\33\ Arthur D. Little. ``Review of Survey Data to Support
Revisions to DOE's Dishwasher Test Procedure,'' December 18, 2001.
Prepared for the U.S. Department of Energy by Arthur D. Little:
Cambridge, MA. Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2014-BT-STD-0021-0001.
---------------------------------------------------------------------------
While the RECS data represent the most recent nationally
representative sample of dishwasher usage, the binning approach that
the RECS survey uses to collect the data does not allow for the
derivation of a point estimate to help determine annual energy and
water use without making assumptions about the distribution of usage
within bins. For example, of the 18% of national households that
responded that they used their dishwashers at least once per day, it is
not known what percentage of these households use their dishwashers
more than once a day or if viewed weekly, more than 7 times a week.
Because the RECS data do not include point estimates of usage, DOE
relies on survey data it used to develop the 2003 residential
dishwasher test procedure amendments and analyzed again during the 2012
standards rulemaking \34\ to estimate the average number of residential
dishwasher cycles per year. In the review, survey data on consumers'
residential dishwasher usage habits from the 1990's were collected from
a number of sources including several residential dishwasher
manufacturers, detergent manufacturers, energy and consumer interest
groups, independent researchers, and government agencies. This study
provides a large data set of point estimates which DOE believes is the
best source of information on usage rates at present. This survey
review was used in the development of the 2003 residential dishwasher
test procedure amendments to reduce the average cycles per year from
264 to 215, which DOE believed was more reflective of dishwasher use
nation-wide at the time and was not inconsistent with the steady
decrease over the previous 20 years in the average-use cycles for a
dishwasher.\35\ Because of the facts detailed above, DOE is proposing
in this document to use an average usage of 215 cycles per year as the
value for average residential dishwasher use instead of 171 cycles
estimated from the RECS survey data. DOE notes that 215 cycles per year
is the number of cycles required to be used to calculate energy usage
in DOE's test procedure for residential dishwashers which is also the
basis for the ENERGY GUIDE label administered by the Federal Trade
Commission. DOE further notes that alternative analysis that relies on
additional assumptions regarding use patterns within the ``binned''
RECS data could yield results similar to those from the earlier data,
depending on the assumptions made for each of the bins. DOE does
recognize that dishwasher usage data are a key input when calculating
energy and water use and ultimately have a direct effect on the
benefits derived from estimated energy and water use savings described
by this proposed rulemaking. DOE is aware that a point estimate for the
annual number of dishwasher cycles is subject to uncertainty given how
data on this topic are collected. Given this uncertainty, DOE
encourages the public to comment on its use of these surveys and the
limitations of each.
---------------------------------------------------------------------------
\34\ Arthur D. Little. ``Review of Survey Data to Support
Revisions to DOE's Dishwasher Test Procedure,'' December 18, 2001.
Prepared for the U.S. Department of Energy by Arthur D. Little:
Cambridge, MA. Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2014-BT-STD-0021-0001
Note that several of the surveys used in this review share the
problem of defining a single value for a category (i.e, a point
estimate), but to a much less extent than the RECS data. Generally
the other surveys minimize this issue by including more categories,
by better distributing categories, and by having more bounded
categories.
\35\ 68 FR 51887 (Aug. 29, 2003) and Arthur D. Little. ``Review
of Survey Data to Support Revisions to DOE's Dishwasher Test
Procedure,'' December 18, 2001. Prepared for the U.S. Department of
Energy by Arthur D. Little: Cambridge, MA. Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2014-BT-STD-0021-0001.
The 215 value was based on the review's recommendation that the
number of average-use cycles per year be reduced into the range of
200 to 233 cycles.
---------------------------------------------------------------------------
DOE did not assume that all dishwashers are operated exactly at the
average usage per year and used other survey data to characterize the
variability in the usage. For purposes of conducting the LCC and PBP
analysis, DOE characterized each usage bin with a probability
distribution. To capture the uncertainty inherent to the usage response
for each household in the RECS sample, DOE used a Monte Carlo
[[Page 76157]]
simulation in the LCC and PBP analysis that selects a value for usage
within the distribution that is used to characterize each bin. The
result of using probability distribution to characterize the RECS
response bins provided a weighted-average dishwasher usage of 171
cycles per year.
Although DOE characterized the usage bins with probability
distributions, it is certainly possible and equally likely that the
weighted-average value is as low as 146 and as high as 453. This
uncertainty led DOE to conclude that the ADL survey review, which
focused more closely and solely on dishwasher usage habits, provided a
more representative value for the average number of cycles per year
that did the RECS survey. The sorting of user responses in RECS into
usage frequency bins, however, allowed DOE to use RECS 2009 to capture
dishwasher usage variability from household to household (since not
every household will run the average number of dishwasher cycles per
year). The LCC and PBP analysis normalized the dishwasher usage by the
ratio of 215-to-171 cycles per year. The resulting range of values used
in the LCC analysis is consistent with the average use in the DOE
residential dishwasher test procedure.
Table IV.6 and Table IV.7 show the estimated average annual energy
and water use for each efficiency level analyzed for standard
residential dishwashers.
Table IV.6--Standard Residential Dishwashers: Average Annual Energy and Water Use by Efficiency Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Energy Use
--------------------------------------------------------------------------------------------------
Total
Efficiency Level Machine + Standby --------------------------------------------------
Water Heating* Drying [dagger] kWh/ kWh/ gal/
kWh/year kWh/year year year year
-------------------------------------------------------------------------------------------------------------------------------------- --------------------------
Baseline.............................................. 177.0 130.0 0.0 307 1,075.0
1..................................................... 150.4 140.3 4.3 295 913.8
2..................................................... 123.9 151.8 4.3 280 752.5
3..................................................... 109.7 120.0 4.3 234 666.5
4..................................................... 78.6 97.1 4.3 180 477.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Shown for the case of electrically heated water.
[dagger] Standby annual energy use based on a dishwasher cycle length of one hour. Standby hours = 8760 hours - (215 cycles x 1 hour) = 8545 hours.
Table IV.7--Compact Residential Dishwashers: Average Annual Energy and Water Use by Efficiency Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Energy Use
--------------------------------------------------------------------------------------------------
Total
Efficiency Level Machine + Standby --------------------------------------------------
Water Heating* Drying [dagger] kWh/ kWh/ gal/
kWh/year kWh/year year year year
-------------------------------------------------------------------------------------------------------------------------------------- --------------------------
Baseline.............................................. 123.9 78.4 19.7 222 752.5
1..................................................... 109.7 78.7 14.5 203 666.5
2..................................................... 70.8 65.9 4.3 141 430.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Shown for the case of electrically heated water.
[dagger] Standby annual energy use based on a dishwasher cycle length of 1 hour. Standby hours = 8760 hours_(215 cycles x 1 hour) = 8545 hours.
Chapter 7 of the NOPR TSD provides details on DOE's energy and
water use analysis for residential dishwashers.
F. Life-Cycle Cost and Payback Period Analysis
DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
residential dishwashers. The LCC is the total consumer expense over the
life of a product, consisting of purchase and installation costs plus
operating costs (expenses for energy use, maintenance, and repair). To
compute the operating costs, DOE discounts future operating costs to
the time of purchase and sums them over the lifetime of the product.
The PBP is the estimated amount of time (in years) it takes consumers
to recover the increased purchase cost (including installation) of a
more efficient product through lower operating costs. DOE calculates
the PBP by dividing the change in purchase cost due to a more stringent
standard by the change in annual operating cost for the year that new
standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to an estimate of the base-case appliance efficiency
distribution. The base-case estimate reflects the market in the absence
of new or amended energy conservation standards, including the market
for products that exceed the current energy conservation standards. In
contrast, the PBP is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units. As stated previously, DOE developed household samples
from the 2009 RECS. For each sample household, DOE determined the
energy consumption for the residential dishwasher and the appropriate
electricity price. By developing a representative sample of households,
the analysis captured the variability in energy consumption and energy
prices associated with the use of residential dishwashers.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy and water prices and price projections, repair and
maintenance costs, product lifetimes, discount rates, and the year that
compliance with standards is required. DOE created distributions of
values for product lifetime, discount rates, and sales taxes, with
probabilities attached to each
[[Page 76158]]
value, to account for their uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP, which
incorporates Crystal Ball\TM\ (a commercially available software
program), relies on a Monte Carlo simulation to incorporate uncertainty
and variability into the analysis. The Monte Carlo simulations randomly
sample input values from the probability distributions and residential
dishwasher user samples. The model calculated the LCC and PBP for
products at each efficiency level for 10,000 housing units per
simulation run.
DOE calculated the LCC and PBP for all customers as if each were to
purchase a new product in the year that compliance with any amended
standards is expected to be required. Any amended standards would apply
to residential dishwashers manufactured 3 years after the date on which
any final amended standard is published. (42 U.S.C. 6295(g)(10)(B)) For
today's NOPR, DOE estimates publication of any final standards in 2016.
Therefore, for purposes of its analysis, DOE used 2019 as the first
year of compliance with any amended standards.
Table IV.8 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
and its appendices of the NOPR TSD.
Table IV.8--Summary of Inputs and Methods for the LCC and PBP Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost...................... Derived by multiplying MPCs by
manufacturer and retailer markups
and sales tax, as appropriate. Used
historical data to derive a price
scaling index to forecast product
costs.
Installation Costs................ Baseline installation cost
determined with data from RS Means.
Assumed no change with efficiency
level.
Annual Energy and Water Use....... The sum of the total per-cycle
annual energy and water use
multiplied by the number of cycles
per year and the standby annual
energy use. Average number of
cycles based on ADL field data.
Variability: Based on the 2009 RECS
normalized to the average number of
cycles.
Energy and Water Prices........... Electricity: Based on EIA's Form 861
data for 2012.
Gas: Based on EIA's Natural Gas
Navigator for 2012.
LPG: Based on EIA's State Energy
Consumption, Price and Expenditures
Estimates for 2012.
Variability: Regional energy prices
determined for 27 regions.
Water: Based on 2012 AWWA/Raftelis
Survey.
Variability: By census region.
Energy and Water Price Trends..... Energy: Forecasted using AEO 2014
price forecasts.
Water: Forecasted using BLS historic
water price index information.
Repair and Maintenance Costs...... Assumed no change with efficiency
level.
Product Lifetime.................. Estimated using survey results from
RECS (1990, 1993, 1997, 2001, 2005,
2009) and the U.S. Census American
Housing Survey (2005, 2007), along
with historic data on appliance
shipments.
Variability: Characterized using
Weibull probability distributions.
Discount Rates.................... Approach involves identifying all
possible debt or asset classes that
might be used to purchase the
considered appliances, or might be
affected indirectly. Primary data
source was the Federal Reserve
Board's SCF ** for 1989, 1992,
1995, 1998, 2001, 2004, 2007, and
2010.
Compliance Date................... 2019
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the NOPR TSD.
** Survey of Consumer Finances.
1. Product Cost
To calculate consumer product costs, DOE multiplied the MPCs
developed in the engineering analysis by the supply-chain markups
described above (along with sales taxes). DOE used different markups
for baseline products and higher-efficiency products, because DOE
applies an incremental markup to the increase in MSP associated with
higher-efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. Experience curve analysis focuses on entire
industries (often operating globally) and aggregates over many causal
factors that may not be well characterized. Experience curve analysis
implicitly includes factors such as efficiencies in labor, capital
investment, automation, materials prices, distribution, and economies
of scale at an industry-wide level.\36\
---------------------------------------------------------------------------
\36\ Taylor, M. and Fujita, K.S. Accounting for Technological
Change in Regulatory Impact Analyses: The Learning Curve Technique.
LBNL-6195E. Lawrence Berkeley National Laboratory, Berkeley, CA.
April 2013. http://escholarship.org/uc/item/3c8709p4#page-1.
---------------------------------------------------------------------------
For the default price trend for this NOPR, DOE estimated an
experience rate for residential dishwashers based on an analysis of
long-term historical data. Producer Price Index (PPI) data specific to
residential dishwashers were not available. Instead, DOE derived a
residential dishwasher price index from 1988 to 2013 using Producer
Price Index (PPI) data for miscellaneous household appliances from the
Bureau of Labor Statistics (BLS). An inflation-adjusted price index was
calculated using the implicit price deflators for GDP for the same
years. This proxy for historic price data was then regressed on the
cumulative quantity of residential dishwashers produced, based on a
corresponding series for total shipments of residential dishwashers.
To calculate an experience rate, a least-squares power-law fit was
performed on the residential dishwasher price index versus cumulative
shipments (including imports). DOE then derived a price factor index,
with the price in 2013 equal to 1, to forecast prices in the year of
compliance for amended energy conservation standards in the LCC and PBP
analysis, and for the NIA, for each subsequent year through 2048. The
index value in each year is a function of the experience rate and the
cumulative production through that year. To derive the latter, DOE used
projected shipments from the base-case projections made for the NIA
(see section IV.G of this notice). The average annual rate of price
decline in the default case is 1.33 percent.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
[[Page 76159]]
materials and parts needed to install the product. DOE used data from
the 2013 RS Means Plumbing Cost data book \37\ to estimate the baseline
installation cost. DOE found no evidence that installation costs would
be impacted with increased efficiency levels.
---------------------------------------------------------------------------
\37\ RS Means, Residential Cost Data, 2013.
---------------------------------------------------------------------------
3. Annual Energy and Water Consumption
For each sampled household, DOE determined the energy and water
consumption for a residential dishwasher at different efficiency levels
using the approach described above in section IV.E of this notice.
4. Energy Prices
DOE derived average annual residential electricity prices for 27
geographic regions using data from EIA's Form EIA-861 database (based
on ``Annual Electric Power Industry Report'').\38\ DOE calculated an
average annual regional residential price by: (1) Estimating an average
residential price for each utility (by dividing the residential
revenues by residential sales); and (2) weighting each utility by the
number of residential consumers it served in that region. The NOPR
analysis used the data for 2012.
---------------------------------------------------------------------------
\38\ Available at: www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------
DOE calculated average residential natural gas prices for each of
the 27 geographic regions using data from EIA's ``Natural Gas
Monthly.'' \39\ DOE calculated average annual regional residential
prices by: (1) Estimating an average residential price for each state;
and (2) weighting each state by the number of residential consumers.
The NOPR analysis used the data for 2012.
---------------------------------------------------------------------------
\39\ Available at: http://www.eia.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.html.
---------------------------------------------------------------------------
DOE calculated average residential LPG prices for each of the 27
geographic regions using data from EIA's ``State Energy Consumption,
Price, and Expenditures Estimates (SEDS).'' \40\ DOE calculated average
annual regional residential prices by: (1) Estimating an average
residential price for each State; and (2) weighting each State by the
number of residential consumers. The NOPR analysis used the data for
2012.
---------------------------------------------------------------------------
\40\ Available at: http://www.eia.gov/state/seds/seds-data-fuel.cfm?sid=US.
---------------------------------------------------------------------------
To estimate energy prices in future years, DOE multiplied the
average regional energy prices discussed in the preceding section by
the forecast of annual national-average residential energy price
changes in the Reference case from AEO 2014, which has an end year of
2040.\41\ To estimate price trends after 2040, DOE used the average
annual rate of change in prices from 2020 to 2040.
---------------------------------------------------------------------------
\41\ U.S. Department of Energy-Energy Information
Administration, Annual Energy Outlook 2013 with Projections to 2040
(Available at: http://www.eia.gov/forecasts/aeo/).
---------------------------------------------------------------------------
5. Water and Wastewater Prices
For today's NOPR, DOE obtained data on water and wastewater prices
for 2012 from the Water and Wastewater Rate Survey conducted by
Raftelis Financial Consultants and the water utility association,
American Water Works Association. The survey, which analyzes each
industry separately, covers approximately 290 water utilities and 214
wastewater utilities. The water survey includes, for each utility, the
cost to consumers of purchasing a given volume of water or treating a
given volume of wastewater. The data provide a division of the total
consumer cost into fixed and volumetric charges. DOE's calculations use
only the volumetric charge to calculate water and wastewater prices,
because only this charge is affected by a change in water use. Average
water and wastewater prices were estimated for each of four census
regions. Each RECS household was assigned a water and wastewater price
depending on its census region location.
To estimate the future trend for water and wastewater prices, DOE
used data on the historic trend in the national water price index (U.S.
city average) from 1970 through 2012, combined with the all-products
CPI for this same period. It extrapolated a future trend based on the
linear inflation-adjusted growth during the 1970 to 2012 period. DOE
used the projected inflation-adjusted water price trend to forecast
water and wastewater prices for residential dishwashers.
Chapter 8 of the NOPR TSD provides more detail about DOE's approach
to developing water and wastewater prices.
6. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing components
that have failed in an appliance; maintenance costs are associated with
maintaining the operation of the product. Typically, small incremental
increases in product efficiency produce no, or only minor, changes in
repair and maintenance costs compared to baseline efficiency products.
During the rulemaking for the May 2012 direct final rule, DOE
requested information as to whether maintenance and repair costs are a
function of efficiency level and product class. Manufacturers responded
that these costs would not increase with efficiency. DOE does not
expect repair costs to have changed since the last rulemaking;
therefore, DOE did not assume that more efficient residential
dishwashers would have greater repair or maintenance costs.
DOE did not have data showing how many households would repair
rather than replace their dishwashers. The replacement frequency is
determined by a survival function which is part of the shipments model.
DOE used an accounting method that tracks the total stock of units by
vintage. DOE estimated a stock of dishwashers by vintage by integrating
historical shipments starting from 1972. Depending on the vintage, a
certain percentage of units will fail and need to be replaced. To
estimate how long a unit will function before failing, DOE used a
survival function based on a product lifetime distribution having an
average value of approximately 15 years. Because DOE assumed that a
consumer's decision to replace or repair their dishwasher was not
impacted by an increase in dishwasher efficiency, the replacement
frequency was unaffected by the increased installed cost, the repair
cost, and the energy costs savings associated with more efficient
dishwashers.
7. Product Lifetime
Because the lifetime of appliances varies depending on utilization
and other factors, DOE develops a distribution of lifetimes from which
specific values are assigned to the appliances in the household sample.
DOE conducted an analysis of residential dishwasher lifetimes in the
field based on a combination of shipments data and RECS 2009 data on
the ages of the residential dishwashers reported in the household
stock. As described in chapter 8 of the NOPR TSD, the analysis yielded
an estimate of mean age for residential dishwashers of approximately 15
years. It also yielded a survival function that DOE incorporated as a
probability distribution in its LCC analysis. See chapter 8 of the NOPR
TSD for further details on the method and sources DOE used to develop
product lifetimes.
8. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households to estimate the present value of future operating costs.
DOE estimated a distribution of residential discount rates for
dishwashers based on consumer financing costs and opportunity cost of
funds related to
[[Page 76160]]
appliance energy cost savings and maintenance costs.
To establish residential discount rates for the LCC analysis, DOE's
approach involved identifying all relevant household debt or asset
classes in order to approximate a consumer's opportunity cost of funds
related to appliance energy cost savings and maintenance costs. It
estimated the average percentage shares of the various types of debt
and equity by household income group using data from the Federal
Reserve Board's Survey of Consumer Finances (SCF) for 1995, 1998, 2001,
2004, 2007, and 2010.\42\ Using the SCF and other sources, DOE then
developed a distribution of rates for each type of debt and asset by
income group to represent the rates that may apply in the year in which
amended standards would take effect. DOE assigned each sample household
a specific discount rate drawn from one of the distributions. The
average rate across all types of household debt and equity and income
groups, weighted by the shares of each class, is 4.49 percent. See
chapter 8 in the NOPR TSD for further details on the development of
consumer discount rates.
---------------------------------------------------------------------------
\42\ Note that two older versions of the SCF are also available
(1989 and 1992); these surveys are not used in this analysis because
they do not provide all of the necessary types of data (e.g., credit
card interest rates). DOE determines that the 15-year span covered
by the six surveys included is sufficiently representative of recent
debt and equity shares and interest rates.
---------------------------------------------------------------------------
9. Base-Case Efficiency Distribution
To accurately estimate the share of consumers that would be
affected by a standard at a particular efficiency level, DOE's LCC
analysis considered the projected distribution of product efficiencies
that consumers purchase under the base case (i.e., the case without new
energy efficiency standards). DOE refers to this distribution of
product of efficiencies as a base-case efficiency distribution.
To estimate the base-case efficiency distribution of standard
residential dishwashers for 2019, DOE relied on data submitted by AHAM
for the May 2012 direct final rule. These data provide shares of
shipments by efficiency level for 2002-2005 and 2008-2010. These data
show a significant increase in the share of ENERGY STAR products in
both periods. To predict the market shares for each efficiency level in
2019, DOE conducted efficiency distribution analysis based on the DOE's
Compliance Certification Database for standard residential dishwashers
and considered the market trends present in the AHAM data, and assumed
these trends would continue in a manner consistent with the decline in
average energy use. This trend is described in chapter 10 of the NOPR
TSD. DOE also conducted efficiency distribution analysis based on DOE's
Compliance Certification Database for compact residential dishwashers.
The estimated shares for the base-case efficiency distribution for
residential dishwashers are shown in Table IV-9. See chapter 8 of the
NOPR TSD for further information on the derivation of the base-case
efficiency distributions. For standard residential dishwashers, DOE
also considered an alternative base-case efficiency distribution that
uses a different set of historical data. This distribution is described
in appendix 8-F of the NOPR TSD.
Table IV.9--Residential Dishwasher Base-Case Efficiency Distribution by Product Class in 2013
----------------------------------------------------------------------------------------------------------------
Standard Compact
---------------------------------------------------------------
Efficiency level Annual energy % of Annual energy % of
use (kWh/year) shipments use (kWh/year) shipments
----------------------------------------------------------------------------------------------------------------
Baseline........................................ 307 12.1 222 48.1
1............................................... 295 43.9 203 14.8
2............................................... 234 3.2 141 37.0
3............................................... 180 0.4 .............. ..............
----------------------------------------------------------------------------------------------------------------
10. Inputs to Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more efficient products,
compared to baseline products, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the product mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation uses the same inputs as the LCC analysis, except that
discount rates are not needed.
11. Rebuttable-Presumption Payback Period
As noted above, EPCA, as amended, establishes a rebuttable
presumption that a standard is economically justified if the Secretary
finds that the additional cost to the consumer of purchasing a product
complying with an energy conservation standard level will be less than
three times the value of the energy (and, as applicable, water) savings
during the first year that the consumer will receive as a result of the
standard, as calculated under the test procedure in place for that
standard. (42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency
level, DOE determined the value of the first year's energy and water
savings by calculating the quantity of those savings in accordance with
the applicable DOE test procedure, and multiplying that amount by the
average energy and water price forecast for the year in which
compliance with the amended standard would be required. The results of
the rebuttable payback period analysis are summarized in section
V.B.1.c of this NOPR.
G. Shipments
DOE uses forecasts of product shipments to calculate the national
impacts of potential amended energy conservation standards on energy
use, NPV, and future manufacturer cash flows. DOE develops shipment
projections based on historical data and an analysis of key market
drivers for residential dishwashers. In DOE's shipments model,
shipments of products are driven by new construction and stock
replacements. The shipments model takes an accounting approach,
tracking market shares of each product class and the vintage of units
in the existing stock. Stock accounting uses
[[Page 76161]]
product shipments as inputs to estimate the age distribution of in-
service product stocks for all years. The age distribution of in-
service product stocks is a key input to calculations of both the NES
and NPV, because operating costs for any year depend on the age
distribution of the stock. DOE also considers the impacts on shipments
from changes in product purchase price and operating cost associated
with higher energy efficiency levels.
New housing forecasts and residential dishwasher saturation data
comprised the two primary inputs for DOE's estimates of new
construction shipments. ``New housing'' includes newly-constructed
single-family and multi-family units (referred to as ``new housing
completions'') and mobile home placements. For new housing completions
and mobile home placements, DOE used AEO 2014 for forecasts of new
housing, and adopted the projections from AEO 2014 for later years.
DOE calibrated the shipments model against historical residential
dishwasher shipments. In general, DOE estimated replacements using a
product retirement function developed from product lifetime. DOE based
the retirement function on a probability distribution for the product
lifetime that was developed in the LCC analysis. The shipments model
assumes that no units are retired below a minimum product lifetime and
that all units are retired before exceeding a maximum product lifetime.
DOE applied a price elasticity parameter to estimate the effect of
standards on residential dishwasher shipments. DOE estimated the price
elasticity parameter from a regression analysis that used purchase
price and efficiency data specific to several residential appliances
during 1980-2002. The estimated ``relative price elasticity''
incorporates the impacts from purchase price, operating cost, and
household income. Based on evidence that the price elasticity of demand
is significantly different over the short run and long run for other
consumer goods (i.e., automobiles),\43\ DOE assumed that the relative
price elasticity declines over time. DOE estimated shipments in each
standards case using the relative price elasticity along with the
change in the relative price between a standards case and the base
case. For details on the shipments analysis, see chapter 9 of the NOPR
TSD.
---------------------------------------------------------------------------
\43\ S. Hymans. Consumer Durable Spending: Explanation and
Prediction, Brookings Papers on Economic Activity, 1971. Vol. 1971,
No. 1, pp. 234-239.
---------------------------------------------------------------------------
H. National Impact Analysis
The NIA assesses the national energy savings (NES) and the national
net present value NPV of total consumer costs and savings that would be
expected to result from new or amended standards at specific efficiency
levels. (``Consumer'' in this context refers to consumers of the
product being regulated.) DOE calculates the NES and NPV based on
projections of annual appliance shipments, along with the annual energy
consumption and total installed cost data from the energy use and LCC
analyses.\44\ For the present analysis, DOE forecasted the energy
savings, operating cost savings, product costs, and NPV of consumer
benefits over the lifetime of products sold from 2019 through 2048.
---------------------------------------------------------------------------
\44\ For the NIA, DOE adjusts the installed cost data from the
LCC analysis to exclude sales tax, which is a transfer.
---------------------------------------------------------------------------
DOE evaluates the impacts of new and amended standards by comparing
base-case projections with standards-case projections. The base-case
projections characterize energy use and consumer costs for each product
class in the absence of new or amended energy conservation standards.
DOE compares these projections with projections characterizing the
market for each product class if DOE adopted new or amended standards
at specific energy efficiency levels (i.e., the TSLs or standards
cases) for that class. For the base-case forecast, DOE considers
historical trends in efficiency and various forces that are likely to
affect the mix of efficiencies over time. For the standards cases, DOE
also considers how a given standard would likely affect the market
shares of efficiencies greater than the standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. The TSD that DOE
provides during the rulemaking help explain the models and how to use
them, and interested parties can review DOE's analyses by changing
various input quantities within the spreadsheet. The NIA spreadsheet
model uses typical values (as opposed to probability distributions) as
inputs.
For the results presented in today's notice, DOE used projections
of energy prices and housing starts from the AEO 2014 Reference case.
As part of the NIA, DOE analyzed scenarios that used inputs from the
AEO 2014 Low Economic Growth and High Economic Growth cases. Those
cases have higher and lower energy price trends compared to the
Reference case, as well as higher and lower housing starts, which
result in higher and lower appliance shipments to new homes. NIA
results based on these cases are presented in appendix 10-C of the NOPR
TSD.
Table IV.10 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR. Discussion of these inputs and methods follows
the table. See chapter 10 of the NOPR TSD for further details.
Table IV.10--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments............................ Annual shipments from shipments
model.
Compliance Date of Standard.......... 2019.
Base-Case Forecasted Efficiencies.... Efficiency distributions are
forecasted based on historical
efficiency data.
Standards-Case Forecasted Used a ``roll-up'' scenario.
Efficiencies.
Annual Energy Consumption per Unit... Annual weighted-average values
are a function of energy use at
each CSL.
Total Installed Cost per Unit........ Annual weighted-average values
are a function of cost at each
CSL.
Incorporates forecast of future
product prices based on
historical data.
Annual Energy Cost per Unit.......... Annual weighted-average values as
a function of the annual energy
consumption per unit and energy
prices.
Repair and Maintenance Cost per Unit. Annual values do not change with
efficiency level.
Energy Prices........................ AEO 2014 forecasts (to 2040) and
extrapolation through 2048.
Energy Site-to-Source Conversion Varies yearly and is generated by
Factor. NEMS-BT.
Discount Rate........................ Three and seven percent real.
Present Year......................... Future expenses discounted to
2014, when the NOPR will be
published.
------------------------------------------------------------------------
[[Page 76162]]
1. National Energy and Water Savings
The national energy and water savings analysis involves a
comparison of national energy and water consumption of the considered
products in each potential standards case (TSL) with consumption in the
base case with no new or amended energy and water conservation
standards. DOE calculated the national energy consumption by
multiplying the number of units (stock) of each product (by vintage or
age) by the unit energy consumption (also by vintage). Vintage
represents the age of the product. DOE calculated annual NES based on
the difference in national energy consumption for the base case
(without amended efficiency standards) and for each higher efficiency
standard. DOE estimated energy consumption and savings based on site
energy and converted the electricity consumption and savings to primary
energy using annual conversion factors derived from the AEO 2014
version of NEMS. Cumulative energy savings are the sum of the NES for
each year over the timeframe of the analysis.
DOE has historically presented NES in terms of primary energy
savings. In the case of electricity use and savings, this quantity
includes the energy consumed by power plants to generate delivered
(site) electricity.
In response to the recommendations of a committee on ``Point-of-Use
and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency
Standards'' appointed by the National Academy of Sciences, DOE
announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in the Federal Register in which DOE
explained its determination that NEMS is the most appropriate tool for
its FFC analysis and its intention to use NEMS for that purpose. 77 FR
49701 (Aug. 17, 2012).
a. Forecasted Efficiency in the Base Case and Standards Cases
A key component of the NIA is the trend in energy efficiency
forecasted for the base case (without new or amended standards) and
each of the standards cases. Section IV.F.9 of this notice describes
how DOE developed a base-case energy efficiency distribution (which
yields a shipment-weighted average efficiency) for each of the
considered product classes for the first year of the forecast period.
To project the trend in efficiency for standard residential dishwashers
over the entire forecast period, DOE utilized the historical trend in
shipment-weighted average efficiency from 2002 to 2010, as provided by
AHAM, model-weighted data from the DOE's Compliance Certification
Database and considered the potential effect of programs such as ENERGY
STAR. The historical trend demonstrates that the shipment-weighted
average annual energy use decreased by almost 75 percent from 2002 to
2010, reaching 309 kWh/year. DOE fit an exponential function to the
2002 to 2010 data that indicated that the base-case shipment-weighted
average annual energy use will asymptotically approach a value of 280
kWh/year by 2048 and remain at that level. This trend is described in
chapter 10 of the NOPR TSD.
DOE determined that a roll-up scenario is most appropriate to
establish the distribution of efficiencies for the year that compliance
with revised residential dishwasher standards would be required. Under
the ``roll-up'' scenario, DOE assumes: (1) Product efficiencies in the
base case that do not meet the standard level under consideration would
``roll-up'' to meet the new standard level; and (2) product
efficiencies above the standard level under consideration would not be
affected. The details of DOE's approach to forecast efficiency trends
are described in chapter 10 of the NOPR TSD.
2. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers of considered appliances are: (1) Total annual
installed cost, (2) total annual savings in operating costs, and (3) a
discount factor. DOE calculates net savings each year as the difference
between the base case and each standards case in total savings in
operating costs and total increases in installed costs. DOE calculates
operating cost savings over the life of each product shipped during the
forecast period.
The operating cost savings are primarily energy cost savings. These
are calculated using the estimated energy savings in each year and the
projected price of the appropriate form of energy. To estimate energy
prices in future years, DOE multiplied the average regional energy
prices discussed in the preceding section by the forecast of annual
national-average residential energy price changes in the Reference case
from AEO 2014, which has an end year of 2040. To estimate price trends
after 2040, DOE used the average annual rate of change in prices from
2020 to 2040.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For
today's NOPR, DOE estimated the NPV of consumer benefits using both a
3-percent and a 7-percent real discount rate. DOE uses these discount
rates in accordance with guidance provided by the Office of Management
and Budget (OMB) to Federal agencies on the development of regulatory
analysis.\45\ The discount rates for the determination of NPV are in
contrast to the discount rates used in the LCC analysis, which are
designed to reflect a consumer's perspective. The 7-percent real value
is an estimate of the average before-tax rate of return to private
capital in the U.S. economy. The 3-percent real value represents the
``social rate of time preference,'' which is the rate at which society
discounts future consumption flows to their present value.
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\45\ OMB Circular A-4 (Sept. 17, 2003), section E, ``Identifying
and Measuring Benefits and Costs. Available at: www.whitehouse.gov/omb/memoranda/m03-21.html.
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a. Total Installed Cost per Unit
As discussed in section IV.F.1 of this NOPR, DOE developed a
residential dishwasher price trend based on an experience rate for
miscellaneous household appliances. It used this trend to forecast the
prices of residential dishwashers sold in each year in the forecast
period. DOE applied the same values to forecast prices for each product
class at each considered efficiency level. By 2048, which is the end
date of the forecast period, the price is forecasted to drop 37.4
percent relative to 2013. DOE's projection of product prices for
residential dishwashers is described in further detail in appendix 10-C
of the NOPR TSD.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
forecasts on the consumer NPV for the considered TSLs for residential
dishwashers. In addition to the default price trend, DOE considered two
product price sensitivity cases: (1) A high price decline case based on
an exponential fit using PPI data for 1988 to 2013; (2) a low price
decline case based on an experience rate derived using PPI and
shipments data for 1991 to 2000. The derivation of these price trends
and the results of these sensitivity cases are described in
[[Page 76163]]
appendix 10-C of the NOPR TSD. In the high price decline case, the NPV
is significantly higher than in the default case. In the low price
decline case, the NPV is slightly lower than in the default case. The
rank order of the TSLs is the same in all of the cases.
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended standards on
consumers, DOE evaluates the impact on identifiable subgroups of
consumers that may be disproportionately affected by a national
standard. DOE evaluated impacts on particular subgroups of consumers by
analyzing the LCC impacts and PBP for those particular consumers from
alternative standard levels. For this rulemaking, DOE analyzed the
impacts of the considered standard levels on low-income households and
senior-only households. Chapter 11 in the NOPR TSD describes the
consumer subgroup analysis.
J. Manufacturer Impact Analysis
The following sections address the various steps taken to analyze
the impacts of the amended standards on manufacturers.
1. Overview
In determining whether an amended energy conservation standard for
residential dishwashers is economically justified, DOE is required to
consider ``the economic impact of the standard on the manufacturers and
on the consumers of the products subject to such standard.'' (42 U.S.C.
6295(o)(2)(B)(i)(I)) The statute also calls for an assessment of the
impact of any lessening of competition that is likely to result from
the adoption of a standard as determined by the Attorney General. (42
U.S.C. 6295(o)(2)(B)(i)(V)) DOE conducted the MIA to estimate the
financial impact of amended energy conservation standards on
manufacturers, and to assess the impacts of such standards on
employment and manufacturing capacity.
The MIA involves both quantitative analysis and qualitative
evaluation. The quantitative elements of the MIA rely on the Government
Regulatory Impact Model (GRIM), an industry cash-flow model customized
for this rulemaking. See section IV.J.2 of this notice for details on
the GRIM. The qualitative parts of the MIA address factors such as
product characteristics, characteristics of particular firms, and
market trends. The complete MIA is discussed in chapter 12 of the NOPR
TSD. DOE conducted the MIA in the three phases described below.
a. Phase 1, Industry Profile
In Phase 1 of the MIA, DOE prepared a profile of the residential
dishwasher manufacturing industry based on the market and technology
assessment prepared for this rulemaking. Before initiating the detailed
impact studies, DOE collected information on the present and past
market structure and characteristics of the industry, tracking trends
in market share data, product attributes, product shipments,
manufacturer markups, and the cost structure for various manufacturers.
The profile also included an analysis of manufacturers in the
industry using Security and Exchange Commission 10-K filings,\46\
Standard & Poor's stock reports,\47\ and corporate annual reports
released by both public and privately held companies. DOE used this and
other publicly available information to derive preliminary financial
inputs for the GRIM including industry revenues, cost of goods sold,
and depreciation, as well as selling, general, and administrative
(SG&A), and research and development (R&D) expenses. Based on its
analysis, DOE used the same industry average financial parameters
developed in support of the May 2012 direct final rule.
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\46\ Available online at www.sec.gov.
\47\ Available online at www.standardandpoors.com.
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b. Phase 2, Industry Cash Flow Analysis
Phase 2 focused on the financial impacts of potential amended
energy conservation standards on the industry as a whole. Amended
energy conservation standards can affect manufacturer cash flows in
three distinct ways: (1) By creating a need for increased investment,
(2) by raising production costs per unit, and (3) by altering revenue
due to higher per-unit prices and/or possible changes in sales volumes.
DOE used the GRIM to model these effects in a cash-flow analysis of the
residential dishwasher manufacturing industry. In performing this
analysis, DOE used the financial parameters from the 2012 residential
dishwasher energy conservation standards rulemaking, the cost-
efficiency curves from the engineering analysis, and the shipment
assumptions from the NIA.
c. Phase 3, Sub-Group Impact Analysis
Using average cost assumptions to develop an industry-cash-flow
estimate may not adequately assess differential impacts of amended
energy conservation standards among manufacturer subgroups. For
example, small businesses, manufacturers of niche products, or
companies exhibiting a cost structure that differs significantly from
the industry average could be more negatively affected. While DOE did
not identify any other subgroup of manufacturers of residential
dishwashers that would warrant a separate analysis, DOE specifically
investigated impacts on small business manufacturers. See section VI.B
of this notice for more information.
The MIA also addresses the direct impact on employment tied to the
manufacturing of residential dishwashers. Using the GRIM, census data
and information gained through manufacturer interviews conducted in
support of the May 2012 direct final rule, DOE estimated the domestic
labor expenditures and number of domestic production workers in the
base case and at each TSL from 2014 to 2048.
2. GRIM
DOE uses the GRIM to quantify the changes in cash flow that alter
industry value. The GRIM is a standard, discounted cash-flow model that
incorporates manufacturer costs, markups, shipments, and industry
financial information as inputs, and models changes in manufacturing
costs, shipments, investments, and margins that may result from amended
energy conservation standards. The GRIM uses these inputs to arrive at
a series of annual cash flows, beginning with the base year of the
analysis, 2014, and continuing to 2048. DOE uses the industry-average
weighted-average cost of capital (WACC) of 8.5 percent, as this
represents the minimum rate of return necessary to cover the debt and
equity obligations manufacturers use to finance operations.
DOE used the GRIM to compare INPV in the base case with INPV at
various TSLs (the standards cases). The difference in INPV between the
base and standards cases represents the financial impact of the amended
standard on manufacturers. Additional details about the GRIM can be
found in chapter 12 of the NOPR TSD.
a. GRIM Key Inputs
Manufacturer Production Costs
Changes in the MPCs of residential dishwashers can affect revenues,
gross margins, and cash flow of the industry, making product cost data
key inputs for DOE's analysis. DOE estimated the MPCs for standard and
compact product classes at the baseline and higher efficiency levels,
as described in section IV.C of this notice. The cost model also
disaggregated the MPCs into the cost of materials, labor, overhead, and
[[Page 76164]]
depreciation. DOE used the MPCs and cost breakdowns as described in
section IV.C of this NOPR, and further detailed in chapter 5 of the
NOPR TSD, for each efficiency level analyzed in the GRIM.
Base-Case Shipments Forecast
The GRIM estimates manufacturer revenues in each year of the
forecast based in part on total unit shipments and the distribution of
these values by efficiency level and product class. Changes in the
efficiency mix and total shipments at each standard level affect
manufacturer finances. For this analysis, the GRIM uses the NIA
shipments forecasts from 2013 to 2048, the end of the analysis period.
To calculate shipments, DOE developed a shipments model for each
product class based on an analysis of key market drivers for
residential dishwashers. For greater detail on the shipments analysis,
see section IV.G of this NOPR and chapter 9 of the NOPR TSD.
Product and Capital Conversion Costs
Amended energy conservation standards may cause manufacturers to
incur conversion costs to bring their production facilities and product
designs into compliance. For the MIA, DOE classified these costs into
two major groups: (1) Product conversion costs and (2) capital
conversion costs. Product conversion costs are investments in research,
development, testing, marketing, and other non-capitalized costs
focused on making product designs comply with the amended energy
conservation standard. Capital conversion costs are investments in
property, plant, and equipment needed to adapt or change existing
production facilities so that new product designs can be fabricated and
assembled.
DOE's estimates of the product and capital conversion costs for the
residential dishwasher manufacturing industry can be found in section
V.B.2 of this NOPR and in chapter 12 of the NOPR TSD.
b. GRIM Scenarios
Standards-Case Shipments Forecasts
The MIA results presented in section V.B.2 of this NOPR all use
shipments from the NIA in the GRIM. For standards case shipments, DOE
assumed that base-case shipments of products that did not meet the new
standard would roll up to meet the standard in the compliance year.
These forecasts also include the impact of relative price elasticity on
shipment volumes. In this regard the balance of first costs and
operating costs factor into the total shipments in the standards case.
See section IV.G of this NOPR for a description of the standards-case
efficiency distributions.
The NIA also used historical data to derive a price scaling index
to forecast product costs. The MPCs and MSPs in the GRIM use the
default price forecast for all scenarios. See section IV.F.1 of this
notice for a discussion of DOE's price forecasting methodology.
Capital Conversion Cost Scenarios
DOE developed two model scenarios for the capital conversion costs
required to meet each TSL. One scenario is based on the capital
conversion costs developed for the energy conservation standards from
the May 2012 direct final rule, scaled to reflect the new efficiency
levels for each product class considered in this NOPR. Additionally,
DOE developed a separate capital conversion cost scenario using the
engineering cost model. For this estimate, DOE identified the design
pathways considered in the engineering analysis, estimated the cost of
the changes in production equipment to implement each design option,
and aggregated these costs to reflect the industry-wide investment
using market information about the number of platform and product
families currently on the market from each manufacturer.
Markup Scenarios
MSP is equal to MPC times a manufacturer markup. The MSP includes
direct manufacturing production costs (i.e., labor, material, and
overhead estimated in DOE's MPCs) and all non-production costs (i.e.,
SG&A, R&D, and interest), along with profit. DOE used the baseline
manufacturer markup, 1.24, developed for the May 2012 direct final rule
for all products when modeling the base case in the GRIM.
For the standards case in the GRIM, DOE modeled two markup
scenarios to represent the uncertainty regarding the potential impacts
on prices and profitability for manufacturers following the
implementation of amended energy conservation standards. For both GRIM
markup scenarios, DOE placed no premium on higher efficiency products.
This assumption is informed by a market structure in which 88 percent
of product shipments currently adhere to ENERGY STAR standards, leaving
little to no room for differentiation by efficiency level alone. The
two standards-case markup scenarios are (1) a preservation of gross
margin as a percentage of revenues markup scenario, and (2) a
preservation of earnings before interest and taxes (EBIT) markup
scenario. Modifying these markups from the base case to the standards
cases yields different sets of impacts on industry revenues and cash
flow.
The preservation of gross margin as a percentage of revenues markup
scenario assumes that the baseline markup of 1.24 is maintained for all
products in the standards case. This scenario represents the upper
bound of industry profitability as manufacturers are able to fully pass
through additional costs due to standards to their customers under this
scenario.
The preservation of EBIT markup scenario is similar to the
preservation of gross margin as a percentage of revenues markup
scenario with the exception that in the standards case, minimally
compliant products lose a fraction of the baseline markup. This
scenario represents the lower bound profitability and a more
substantial impact on the dishwasher industry as manufacturers accept a
lower margin in an attempt to offer price competitive entry level
products while maintaining the same level of EBIT they saw prior to
amended standards.
3. Manufacturer Interviews
For this rulemaking, DOE relies on information gathered from
manufacturer interviews conducted in support of the May 2012 direct
final rule. For that rulemaking, DOE interviewed manufacturers
representing more than 80 percent of residential dishwasher sales.
These interviews were in addition to those DOE conducted as part of the
engineering analysis for the May 2012 direct final rule. DOE used these
interviews to tailor the GRIM for today's rule to incorporate unique
financial characteristics of the industry. All interviews provided
information that DOE used to evaluate the impacts of potential amended
energy conservation standards on manufacturer cash flows, manufacturing
capacities, and employment levels. See appendix 12-A of the NOPR TSD
for additional information on the previous MIA interviews. The
following sections describe the most significant issues identified by
manufacturers during the interviews conducted in support of the May
2012 direct final rule.
a. Dishwasher Performance
All manufacturers interviewed expressed concerns about the
potential impacts of amended standards on product performance, citing
several adverse consequences of standards above those agreed upon in
the Joint Petition. For higher efficiency standards, the performance
metrics
[[Page 76165]]
manufacturers expected to be most severely impacted include wash
performance, drying performance, cycle time, and the noise levels
reached in operation. In considering these metrics, manufacturers
anticipated negative reactions ranging from small but meaningful
changes in consumer behavior to higher rates of service calls and
returns. For efficiency standards well above those proposed in the
Joint Petition, manufacturers expected blanket rejection of poorly
performing products in the market. In considering impacts to wash
performance, manufacturers cited an increase in unnecessary rinsing or
washing of dishes prior to loading the dishwasher, switching to a more
aggressive cycle, and running multiple cycles when dishes are not
adequately cleaned in a single cycle as the most likely changes in
consumer behavior. Manufacturers suggested that any of these changes
would result in an increase in both energy and water consumption over
that used by a dishwasher of satisfactory performance. To mitigate the
impact of future standards on product performance, several
manufacturers recommended the adoption of a performance metric into the
test procedure and standard.
While all manufacturers suggested that the efficiency level
specified in the Joint Petition would not likely have a substantial
negative impact on wash performance, some manufacturers noted that
standards above this level would result in a decrease in performance
unless substantially higher-cost technology changes were implemented.
The comments did not indicate the specific technology changes that
would be required. Even without such technology changes, however,
several manufacturers offer or have offered products at efficiency
levels above those specified by the Joint Petition, including the max-
tech efficiency level identified in today's proposed rule. Accordingly,
DOE evaluated these higher efficiency levels as part of this
rulemaking.
DOE conducted investigative testing to assess cleaning performance
in support of this NOPR according to the ENERGY STAR Test Method for
Determining Dishwasher Cleaning Performance (Cleaning Performance Test
Method).\48\ The testing included multiple units from different
manufacturers at multiple efficiency levels. Based on this internal
testing and the availability of products on the market, DOE determined
that products from the baseline efficiency level to Efficiency Level 3
for standard residential dishwashers are able to maintain cleaning
performance.
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\48\ * * *
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b. Test Procedures
During interviews conducted as part of the development of the May
2012 direct final rule for residential dishwashers, manufacturers
raised concerns over the DOE dishwasher test procedure and the
multitude of additional dishwasher test procedures in the field at that
time. Several manufacturers suggested that the DOE test procedure did
not accurately capture the energy used by dishwashers in the field.
These manufacturers cited the single cycle specification and lack of
performance metrics in the test procedure as providing an easy avenue
for circumvention of the standards. In the scenario described,
manufacturers could optimize a particular cycle to perform well on the
DOE test procedure with the implicit understanding that this cycle will
not meet customer expectations and thus will not be used in the field
as customers opt for a different, more energy-intensive cycle.
In contrast, other manufacturers raised concerns over expanding the
test procedure to cover multiple cycles, citing the additional testing
burden this would generate. Similarly, some manufacturers raised
concerns over how DOE would implement a performance test, noting that
there already exist numerous performance tests in the industry
including those developed by AHAM, IEC, and Consumer Reports and that
each performance test procedure favors a different machine cycle
algorithm.
As discussed in sections II.A and II.B.3 of this NOPR, the DOE test
procedure for residential dishwashers is found at Title 10 of CFR part
430, subpart B, appendix C1 (proposed to be redesignated as appendix C
in this rulemaking). Although appendix C1 does not include provisions
for measuring cleaning performance, the ENERGY STAR program recently
finalized the Cleaning Performance Test Method. The Cleaning
Performance Test Method harmonizes with the procedures in appendix C1,
requiring manufacturers to test on the same cycles. Appendix C1 also
requires that testing be conducted on the cycles recommended for
completely washing a full load of normally soiled dishes.
c. Increased Competition
During interviews conducted in support of the May 2012 direct final
rule, manufacturers of both baseline and high efficiency products
anticipated an increase in competition in industry stemming from
amended standards. Manufacturers whose market share was largely
attributed to baseline products expected to see either the removal of
features from higher efficiency units as a means to cut costs to
maintain a low-cost minimally-compliant product, or the disappearance
of entry-level models as they are forced to add other features and cost
in line with current higher efficiency products. If the latter approach
prevails, manufacturers of higher efficiency products expected to see
increased competition as manufacturers that previously focused on low
efficiency products moved into their target segment of the market. As
noted in section III.D.1.c of this NOPR, the Attorney General provides
DOE with a determination and analysis of the impact of any lessening of
competition that is likely to result from the imposition of the
standard. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii))
d. Cumulative Regulatory Burden
During interviews conducted in support of the May 2012 direct final
rule, several manufacturers noted that residential dishwashers are but
one of a suite of appliances they produce and that the cumulative
burden of research and development to meet standards, capital
expenditures and retraining of staff to produce products at the new
standards, and product testing to certify compliance of new products
represent a significant burden when taken in combination across their
various product lines. Manufacturers suggested that the ability to
establish standards in a coordinated fashion by such vehicles as the
Joint Petition and receiving adequate notice of DOE's plans for amended
standards are both necessary elements in mitigating the cumulative
burden and aligning changes in efficiency regulations with the product
development cycle. Cumulative regulatory burden is discussed further in
section V.B.2.e of this NOPR and chapter 12 of the NOPR TSD.
K. Emissions Analysis
In the emissions analysis, DOE estimates the reduction in power
sector emissions of carbon dioxide (CO2), nitrogen oxides
(NOX), sulfur dioxide (SO2), and mercury (Hg)
from potential energy conservation standards for residential
dishwashers. In addition to estimating impacts of standards on power
sector emissions, DOE estimates emissions impacts in production
activities (extracting, processing, and transporting fuels) that
provide the energy inputs to power plants. These are referred to as
``upstream'' emissions. Together, these emissions account for the FFC.
In accordance with DOE's FFC
[[Page 76166]]
Statement of Policy (76 FR 51281 (Aug. 18, 2011) as amended at 77 FR
49701 (August 17, 2012)), the FFC analysis also includes impacts on
emissions of methane (CH4) and nitrous oxide
(N2O), both of which are recognized as greenhouse gases.
DOE primarily conducted the emissions analysis using emissions
factors for CO2 and most of the other gases derived from
data in AEO 2014. Combustion emissions of CH4 and
N2O were estimated using emissions intensity factors
published by the Environmental Protection Agency (EPA) in its
Greenhouse Gas (GHG) Emissions Factors Hub.\49\ DOE developed separate
emissions factors for power sector emissions and upstream emissions.
The method that DOE used to derive emissions factors is described in
chapter 13 of the NOPR TSD.
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\49\ See http://www.epa.gov/climateleadership/inventory/ghg-emissions.html.
---------------------------------------------------------------------------
For CH4 and N2O, DOE calculated emissions
reduction in tons and also in terms of units of carbon dioxide
equivalent (CO2eq). Gases are converted to CO2eq
by multiplying each ton of the greenhouse gas by the gas's global
warming potential (GWP) over a 100-year time horizon. Based on the
Fifth Assessment Report of the Intergovernmental Panel on Climate
Change,\50\ DOE used GWP values of 28 for CH4 and 265 for
N2O.
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\50\ IPCC, 2013: Climate Change 2013: The Physical Science
Basis. Contribution of Working Group I to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Stocker,
T.F., D. Qin, G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A.
Nauels, Y. Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge
University Press, Cambridge, United Kingdom and New York, NY, USA.
Chapter 8.
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EIA prepares the AEO using NEMS. Each annual version of NEMS
incorporates the projected impacts of existing air quality regulations
on emissions. AEO 2014 generally represents current legislation and
environmental regulations, including recent government actions, for
which implementing regulations were available as of October 31, 2013.
SO2 emissions from affected electric generating units
(EGUs) are subject to nationwide and regional emissions cap-and-trade
programs. Title IV of the Clean Air Act sets an annual emissions cap on
SO2 for affected EGUs in the 48 contiguous States and the
District of Columbia (DC). SO2 emissions from 28 eastern
States and DC were also limited under the Clean Air Interstate Rule
(CAIR). 70 FR 25162 (May 12, 2005). CAIR, which created an allowance-
based trading program that operates along with the Title IV program,
was remanded to the EPA by the U.S. Court of Appeals for the District
of Columbia Circuit, but it remained in effect.\51\ In 2011, EPA issued
a replacement for CAIR, the Cross-State Air Pollution Rule (CSAPR). 76
FR 48208 (Aug. 8, 2011). On August 21, 2012, the DC Circuit issued a
decision to vacate CSAPR.\52\ The court ordered EPA to continue
administering CAIR. The emissions factors used for today's NOPR, which
are based on AEO 2014, assume that CAIR remains a binding regulation
through 2040.\53\
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\51\ See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008);
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
\52\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38
(D.C. Cir. 2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 3696,
81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
\53\ On April 29, 2014, the U.S. Supreme Court reversed the
judgment of the DC Circuit and remanded the case for further
proceedings consistent with the Supreme Court's opinion. The Supreme
Court held in part that EPA's methodology for quantifying emissions
that must be eliminated in certain states due to their impacts in
other downwind states was based on a permissible, workable, and
equitable interpretation of the Clean Air Act provision that
provides statutory authority for CSAPR. See EPA v. EME Homer City
Generation, No 12-1182, slip op. at 32 (U.S. April 29, 2014).
Because DOE is using emissions factors based on AEO 2014 for today's
NOPR, the NOPR assumes that CAIR, not CSAPR, is the regulation in
force. The difference between CAIR and CSAPR is not relevant for the
purpose of DOE's analysis of SO2 emissions.
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The attainment of emissions caps is typically flexible among EGUs
and is enforced through the use of emissions allowances and tradable
permits. Beginning in 2016, however, SO2 emissions will
decline significantly as a result of the Mercury and Air Toxics
Standards (MATS) for power plants. 77 FR 9304 (Feb. 16, 2012). In the
final MATS rule, EPA established a standard for hydrogen chloride as a
surrogate for acid gas hazardous air pollutants (HAP), and also
established a standard for SO2 (a non-HAP acid gas) as an
alternative equivalent surrogate standard for acid gas HAP. The same
controls are used to reduce HAP and non-HAP acid gas; thus,
SO2 emissions will be reduced as a result of the control
technologies installed on coal-fired power plants to comply with the
MATS requirements for acid gas. AEO 2014 assumes that, in order to
continue operating, coal plants must have either flue gas
desulfurization or dry sorbent injection systems installed by 2016.
Both technologies, which are used to reduce acid gas emissions, also
reduce SO2 emissions. Under the MATS, emissions will be far
below the cap established by CAIR, so it is unlikely that excess
SO2 emissions allowances resulting from the lower
electricity demand would be needed or used to permit offsetting
increases in SO2 emissions by any regulated EGU. Therefore,
DOE believes that energy efficiency standards will reduce
SO2 emissions in 2016 and beyond.
CAIR established a cap on NOX emissions in 28 eastern
States and the District of Columbia.\54\ Energy conservation standards
are expected to have little effect on NOX emissions in those
States covered by CAIR because excess NOX emissions
allowances resulting from the lower electricity demand could be used to
permit offsetting increases in NOX emissions. However,
standards would be expected to reduce NOX emissions in the
States not affected by the caps, so DOE estimated NOX
emissions reductions from the standards considered in today's NOPR for
these States.
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\54\ CSAPR also applies to NOX, and it would
supersede the regulation of NOX under CAIR. As stated
previously, the current analysis assumes that CAIR, not CSAPR, is
the regulation in force. The difference between CAIR and CSAPR with
regard to DOE's analysis of NOX is slight.
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The MATS limit mercury emissions from power plants, but they do not
include emissions caps. DOE estimated mercury emissions using emissions
factors based on AEO 2014, which incorporates the MATS.
L. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of this proposed rule, DOE considered
the estimated monetary benefits from the reduced emissions of
CO2 and NOX that are expected to result from each
of the TSLs considered. In order to make this calculation analogous to
the calculation of the NPV of consumer benefit, DOE considered the
reduced emissions expected to result over the lifetime of equipment
shipped in the forecast period for each TSL. This section summarizes
the basis for the monetary values used for each of these emissions and
presents the values considered in this NOPR.
For today's NOPR, DOE relied on a set of values for the SCC that
was developed by a Federal interagency process. The basis for these
values is summarized below, and a more detailed description of the
methodologies used is provided as an appendix to chapter 14 of the NOPR
TSD.
1. Social Cost of Carbon
The SCC is an estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is
intended to include (but is not limited to) changes in net agricultural
productivity, human health, property damages from
[[Page 76167]]
increased flood risk, and the value of ecosystem services. Estimates of
the SCC are provided in dollars per metric ton of CO2. A
domestic SCC value is meant to reflect the value of damages in the
United States resulting from a unit change in CO2 emissions,
while a global SCC value is meant to reflect the value of damages
worldwide.
Under section 1(b) of Executive Order 12866, 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 purpose of the SCC estimates presented here is
to allow agencies to incorporate the monetized social benefits of
reducing CO2 emissions into cost-benefit analyses of
regulatory actions. The estimates are presented with an acknowledgement
of the many uncertainties involved and with a clear understanding that
they should be updated over time to reflect increasing knowledge of the
science and economics of climate impacts.
As part of the interagency process that developed these SCC
estimates, technical experts from numerous agencies met on a regular
basis to consider public comments, explore the technical literature in
relevant fields, and discuss key model inputs and assumptions. The main
objective of this process was to develop a range of SCC values using a
defensible set of input assumptions grounded in the existing scientific
and economic literatures. In this way, key uncertainties and model
differences transparently and consistently inform the range of SCC
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
When attempting to assess the incremental economic impacts of
CO2 emissions, the analyst faces a number of challenges. A
report from the National Research Council \55\ points out that any
assessment will suffer from uncertainty, speculation, and lack of
information about: (1) Future emissions of GHGs; (2) the effects of
past and future emissions on the climate system; (3) the impact of
changes in climate on the physical and biological environment; and (4)
the translation of these environmental impacts into economic damages.
As a result, any effort to quantify and monetize the harms associated
with climate change will raise questions of science, economics, and
ethics and should be viewed as provisional.
---------------------------------------------------------------------------
\55\ National Research Council. Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use (2009). National Academies
Press: Washington, DC.
---------------------------------------------------------------------------
Despite the limits of both quantification and monetization, SCC
estimates can be useful in estimating the social benefits of reducing
CO2 emissions. The agency can estimate the benefits from
reduced (or costs from increased) emissions in any future year by
multiplying the change in emissions in that year by the SCC values
appropriate for that year. The NPV of the benefits can then be
calculated by multiplying each of these future benefits by an
appropriate discount factor and summing across all affected years.
It is important to emphasize that the interagency process is
committed to updating these estimates as the science and economic
understanding of climate change and its impacts on society improves
over time. In the meantime, the interagency group will continue to
explore the issues raised by this analysis and consider public comments
as part of the ongoing interagency process.
b. Development of Social Cost of Carbon Values
In 2009, an interagency process was initiated to offer a
preliminary assessment of how best to quantify the benefits from
reducing carbon dioxide emissions. To ensure consistency in how
benefits are evaluated across Federal agencies, the Administration
sought to develop a transparent and defensible method, specifically
designed for the rulemaking process, to quantify avoided climate change
damages from reduced CO2 emissions. The interagency group
did not undertake any original analysis. Instead, it combined SCC
estimates from the existing literature to use as interim values until a
more comprehensive analysis could be conducted. The outcome of the
preliminary assessment by the interagency group was a set of five
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33,
$19, $10, and $5 per metric ton of CO2. These interim values
represented the first sustained interagency effort within the U.S.
government to develop an SCC for use in regulatory analysis. The
results of this preliminary effort were presented in several proposed
and final rules.
c. Current Approach and Key Assumptions
After the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates.
Specially, the group considered public comments and further explored
the technical literature in relevant fields. The interagency group
relied on three integrated assessment models commonly used to estimate
the SCC: the FUND, DICE, and PAGE models. These models are frequently
cited in the peer-reviewed literature and were used in the last
assessment of the Intergovernmental Panel on Climate Change (IPCC).
Each model was given equal weight in the SCC values that were
developed.
Each model takes a slightly different approach to model how changes
in emissions result in changes in economic damages. A key objective of
the interagency process was to enable a consistent exploration of the
three models, while respecting the different approaches to quantifying
damages taken by the key modelers in the field. An extensive review of
the literature was conducted to select three sets of input parameters
for these models: climate sensitivity, socio-economic and emissions
trajectories, and discount rates. A probability distribution for
climate sensitivity was specified as an input into all three models. In
addition, the interagency group used a range of scenarios for the
socio-economic parameters and a range of values for the discount rate.
All other model features were left unchanged, relying on the model
developers' best estimates and judgments.
The interagency group selected four sets of SCC values for use in
regulatory analyses. Three sets of values are based on the average SCC
from the three integrated assessment models, at discount rates of 2.5,
3, and 5 percent. The fourth set, which represents the 95th percentile
SCC estimate across all three models at a 3-percent discount rate, was
included to represent higher-than-expected impacts from temperature
change further out in the tails of the SCC distribution. The values
grow in real terms over time. Additionally, the interagency group
determined that a range of values from 7 percent to 23 percent should
be used to adjust the global SCC to calculate domestic effects,\56\
although preference is given to consideration of the global benefits of
reducing CO2 emissions. Table IV.11 presents the values in
the 2010 interagency group report,\57\ which is
[[Page 76168]]
reproduced in appendix 14-A of the NOPR TSD.
---------------------------------------------------------------------------
\56\ It is recognized that this calculation for domestic values
is approximate, provisional, and highly speculative. There is no a
priori reason why domestic benefits should be a constant fraction of
net global damages over time.
\57\ Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866. Interagency Working Group on Social Cost of
Carbon, United States Government (February 2010) (Available at:
www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf).
Table IV.11--Annual SCC Values From 2010 Interagency Report, 2010-2050
(2007$ per metric ton CO2)
----------------------------------------------------------------------------------------------------------------
Discount Rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2010............................................ 4.7 21.4 35.1 64.9
2015............................................ 5.7 23.8 38.4 72.8
2020............................................ 6.8 26.3 41.7 80.7
2025............................................ 8.2 29.6 45.9 90.4
2030............................................ 9.7 32.8 50.0 100.0
2035............................................ 11.2 36.0 54.2 109.7
2040............................................ 12.7 39.2 58.4 119.3
2045............................................ 14.2 42.1 61.7 127.8
2050............................................ 15.7 44.9 65.0 136.2
----------------------------------------------------------------------------------------------------------------
The SCC values used for today's notice were generated using the
most recent versions of the three integrated assessment models that
have been published in the peer-reviewed literature.\58\
---------------------------------------------------------------------------
\58\ 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
(May 2013; revised November 2013) (Available at:
http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).
---------------------------------------------------------------------------
Table IV.12 shows the updated sets of SCC estimates in 5-year
increments from 2010 to 2050. The full set of annual SCC estimates
between 2010 and 2050 is reported in appendix 14-B of the NOPR TSD. The
central value that emerges is the average SCC across models at the 3-
percent discount rate. However, for purposes of capturing the
uncertainties involved in regulatory impact analysis, the interagency
group emphasizes the importance of including all four sets of SCC
values.
Table IV.12--Annual SCC Values from 2013 Interagency Report, 2010-2050
(2007$ per metric ton CO2)
----------------------------------------------------------------------------------------------------------------
Discount Rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2010............................................ 11 32 51 89
2015............................................ 11 37 57 109
2020............................................ 12 43 64 128
2025............................................ 14 47 69 143
2030............................................ 16 52 75 159
2035............................................ 19 56 80 175
2040............................................ 21 61 86 191
2045............................................ 24 66 92 206
2050............................................ 26 71 97 220
----------------------------------------------------------------------------------------------------------------
It is important to recognize that a number of key uncertainties
remain, and that current SCC estimates should be treated as provisional
and revisable because they will evolve with improved scientific and
economic understanding. The interagency group also recognizes that the
existing models are imperfect and incomplete. The 2009 National
Research Council report mentioned above points out that there is
tension between the goal of producing quantified estimates of the
economic damages from an incremental ton of carbon and the limits of
existing efforts to model these effects. There are a number of
analytical challenges that are being addressed by the research
community, including research programs housed in many of the Federal
agencies participating in the interagency process to estimate the SCC.
The interagency group intends to periodically review and reconsider
those estimates to reflect increasing knowledge of the science and
economics of climate impacts, as well as improvements in modeling.
In summary, in considering the potential global benefits resulting
from reduced CO2 emissions, DOE used the values from the
2013 interagency report adjusted to 2013$ using the implicit price
deflator for GDP from the Bureau of Economic Analysis. For each of the
four sets of SCC values, the values for emissions in 2015 were $12.0,
$40.5, $62.4, and $119 per metric ton avoided (values expressed in
2013$). DOE derived values after 2050 using the relevant growth rates
for the 2040-2050 period in the interagency update.
DOE multiplied the CO2 emissions reduction estimated for
each year by the SCC value for that year in each of the
[[Page 76169]]
four cases. To calculate a present value of the stream of monetary
values, DOE discounted the values in each of the four cases using the
specific discount rate that had been used to obtain the SCC values in
each case.
2. Valuation of Other Emissions Reductions
As noted above, DOE has taken into account how amended energy
conservation standards would reduce site NOX emissions
nationwide and increase power sector NOX emissions in those
22 States not affected by the CAIR. DOE estimated the monetized value
of net NOX emissions reductions resulting from each of the
TSLs considered for today's NOPR based on estimates found in the
relevant scientific literature. Estimates of monetary value for
reducing NOX from stationary sources range from $476 to
$4,893 per ton in 2013$.\59\ DOE calculated monetary benefits using a
medium value for NOX emissions of $2,684 per short ton (in
2013$), and real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------
\59\ U.S. Office of Management and Budget, Office of Information
and Regulatory Affairs, 2006 Report to Congress on the Costs and
Benefits of Federal Regulations and Unfunded Mandates on State,
Local, and Tribal Entities (2006) (Available at: www.whitehouse.gov/sites/default/files/omb/assets/omb/inforeg/2006_cb/2006_cb_final_report.pdf).
---------------------------------------------------------------------------
DOE is evaluating appropriate monetization of avoided
SO2 and Hg emissions in energy conservation standards
rulemakings. DOE has not included monetization of those emissions in
the current analysis.
M. Utility Impact Analysis
The utility impact analysis estimates several effects on the power
generation industry that would result from the adoption of new or
amended energy conservation standards. In the utility impact analysis,
DOE analyzes the changes in installed electrical capacity and
generation that would result for each trial standard level. The utility
impact analysis is based on published output from NEMS, which is a
public domain, multi-sectored, partial equilibrium model of the U.S.
energy sector. Each year, NEMS is updated to produce the AEO reference
case as well as a number of side cases that estimate the economy-wide
impacts of changes to energy supply and demand. DOE uses those
published side cases that incorporate efficiency-related policies to
estimate the marginal impacts of reduced energy demand on the utility
sector. The output of this analysis is a set of time-dependent
coefficients that capture the change in electricity generation, primary
fuel consumption, installed capacity and power sector emissions due to
a unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of energy savings calculated in the NIA to
provide estimates of selected utility impacts of new or amended energy
conservation standards. Chapter 15 of the NOPR TSD describes the
utility impact analysis in further detail.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts include
both direct and indirect impacts. Direct employment impacts are any
changes in the number of employees of manufacturers of the products
subject to standards, their suppliers, and related service firms. The
MIA addresses those impacts. Indirect employment impacts from standards
consist of the net jobs created or eliminated in the national economy,
other than in the manufacturing sector being regulated, caused by: (1)
Reduced spending by end users on energy; (2) reduced spending on new
energy supply by the utility industry; (3) increased spending on new
products to which the new standards apply; and (4) the effects of those
three factors throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS).\60\ The BLS regularly publishes its estimates
of the number of jobs per million dollars of economic activity in
different sectors of the economy, as well as the jobs created elsewhere
in the economy by this same economic activity. Data from BLS indicate
that expenditures in the utility sector generally create fewer jobs
(both directly and indirectly) than expenditures in other sectors of
the economy.\61\ There are many reasons for these differences,
including wage differences and the fact that the utility sector is more
capital-intensive and less labor-intensive than other sectors. Energy
conservation standards have the effect of reducing consumer utility
bills. Because reduced consumer expenditures for energy likely lead to
increased expenditures in other sectors of the economy, the general
effect of efficiency standards is to shift economic activity from a
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, based
on the BLS data alone, DOE believes net national employment will
increase due to shifts in economic activity resulting from amended
standards for residential dishwashers.
---------------------------------------------------------------------------
\60\ Data on industry employment, hours, labor compensation,
value of production, and the implicit price deflator for output for
these industries are available upon request by calling the Division
of Industry Productivity Studies (202-691-5618) or by sending a
request by email to [email protected]. Available at: www.bls.gov/news.release/prin1.nr0.htm.
\61\ See Bureau of Economic Analysis, Regional Multipliers: A
User Handbook for the Regional Input-Output Modeling System (RIMS
II). Washington, DC. U.S. Department of Commerce, 1992.
---------------------------------------------------------------------------
For the amended standard levels considered in this NOPR, DOE
estimated indirect national employment impacts using an input/output
model of the U.S. economy called Impact of Sector Energy Technologies
version 3.1.1 (ImSET).\62\ ImSET is a special-purpose version of the
``U.S. Benchmark National Input-Output'' (I-O) model, which was
designed to estimate the national employment and income effects of
energy-saving technologies. The ImSET software includes a computer-
based I-O model having structural coefficients that characterize
economic flows among 187 sectors most relevant to industrial,
commercial, and residential building energy use.
---------------------------------------------------------------------------
\62\ J.M. Roop, M.J. Scott, and R.W. Schultz, ImSET 3.1: Impact
of Sector Energy Technologies, PNNL-18412, Pacific Northwest
National Laboratory, 2009. Available at: www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and understands the uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Because ImSET does not incorporate price changes, the
employment effects predicted by ImSET may over-estimate actual job
impacts over the long run for this rulemaking. Because ImSET predicts
small job impacts resulting from this rulemaking, regardless of these
uncertainties, the actual job impacts are likely to be negligible in
the overall economy. For more details on the employment impact
analysis, see chapter 16 of the NOPR TSD.
V. Analytical Results
The following section addresses the results from DOE's analyses
with respect to potential energy conservation standards for residential
dishwashers for both product classes. It addresses the TSLs examined by
DOE and the projected impacts of each of these levels if adopted as
energy conservation standards for residential dishwashers. Additional
details regarding DOE's analyses are contained in the NOPR TSD
supporting this notice.
[[Page 76170]]
A. Trial Standard Levels
DOE analyzed the benefits and burdens of three TSLs for residential
dishwashers. These TSLs were developed using combinations of efficiency
levels for the standard and compact product classes analyzed by DOE.
DOE presents the results for those TSLs in today's rule. DOE presents
the results for all efficiency levels that it analyzed in the NOPR TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels for
residential dishwashers. TSL 3 represents the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for both
standard and compact residential dishwashers. TSL 2 consists of the
next efficiency level below the max-tech level for both standard and
compact residential dishwashers. TSL 1 consists of the first efficiency
level considered above the baseline for standard residential
dishwashers, and the baseline level for compacts.
Table V.1--Trial Standard Levels for Residential Dishwashers
----------------------------------------------------------------------------------------------------------------
Standard Compact
--------------------------------------------------------------------------
TSL Annual energy Annual energy
CSL use (kWh) CSL use (kWh)
----------------------------------------------------------------------------------------------------------------
1.................................... 1 295 Baseline................. 222
2.................................... 3 234 1........................ 203
3.................................... 4 180 2........................ 141
----------------------------------------------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on residential dishwasher
consumers by looking at the effects potential amended standards would
have on the LCC and PBP. DOE also examined the impacts of potential
standards on consumer subgroups. These analyses are discussed below.
a. Life-Cycle Cost and Payback Period
To evaluate the net economic impact of potential amended energy
conservation standards on consumers of residential dishwashers, DOE
conducted LCC and PBP analyses for each TSL. In general, higher-
efficiency products would affect consumers in two ways: (1) Purchase
price would increase, and (2) annual operating costs would decrease.
Inputs used for calculating the LCC and PBP include total installed
costs (i.e., product price plus installation costs), and operating
costs (i.e., annual energy savings, energy prices, energy price trends,
repair costs, and maintenance costs). The LCC calculation also uses
product lifetime and a discount rate.
Chapter 8 of the NOPR TSD provides detailed information on the LCC
and PBP analyses.
Table V.2 through Table V.5 show the LCC and PBP results for all
efficiency levels considered for both standard and compact residential
dishwashers. In the first of each pair of tables, the simple payback is
measured relative to the baseline product. In the second tables, the
LCC savings are measured relative to the base-case efficiency
distribution in the compliance year (see section IV.F.9 of this NOPR).
No impacts occur when the base-case efficiency for a specific consumer
equals or exceeds the efficiency at a given TSL; a standard would have
no effect because the product installed would be at or above that
standard level without amended standards.
Table V.2--Average LCC and PBP Results by Efficiency Level for Standard Residential Dishwashers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs 2013$
Efficiency ---------------------------------------------------------------- Simple
TSL level First year's Lifetime payback years
Installed cost operating cost operating cost LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
_....................................................... 0 483 45 518 1,000 _
1....................................................... 1 495 43 492 987 6.1
_....................................................... 2 531 40 462 993 10.8
2....................................................... 3 582 34 387 970 9.0
3....................................................... 4 582 26 296 879 5.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.3--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Standard Residential
Dishwashers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of consumers Average
TSL Efficiency that savings *
level experience ---------------
----------------
Net cost 2013$
----------------------------------------------------------------------------------------------------------------
1............................................................... 1 6 2
_............................................................... 2 39 -2
2............................................................... 3 53 21
[[Page 76171]]
3............................................................... 4 33 112
----------------------------------------------------------------------------------------------------------------
* The calculation includes households with zero LCC savings (no impact).
Table V.4--Average LCC and PBP Results by Efficiency Level for Compact Residential Dishwashers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs 2013$
Efficiency ---------------------------------------------------------------- Simple payback
TSL level First year's Lifetime years
Installed cost operating cost operating cost LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 0 456 26 302 758 ..............
2....................................................... 1 467 24 274 741 4.5
3....................................................... 2 485 16 188 673 2.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.5--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Compact Residential
Dishwashers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------
% of consumers Average
TSL Efficiency that savings *
level experience ---------------
----------------
Net cost 2013
----------------------------------------------------------------------------------------------------------------
1............................................................... 0 .............. ..............
2............................................................... 1 9 8
3............................................................... 2 6 51
----------------------------------------------------------------------------------------------------------------
Note: The calculation includes households with zero LCC savings (no impact).
b. Consumer Subgroup Analysis
As described in section IV.I of this notice, DOE determined the
impact of the considered TSLs on low-income households and senior-only
households.\63\ Table V.6 compares the average LCC savings at each
efficiency level for the two consumer subgroups, along with the average
LCC savings for the entire sample for each product class for
residential dishwashers. The average LCC savings for low-income
households and senior-only households at the considered efficiency
levels are not substantially different from the average for all
households. Chapter 11 of the NOPR TSD presents the complete LCC and
PBP results for the two subgroups.
---------------------------------------------------------------------------
\63\ DOE did not analyze subgroup impacts for compact
dishwashers because the saturation of these products is extremely
small.
Table V.6--Standard Residential Dishwashers: Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings (2013$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 2 1 2 6.2 8.4 6.1
2....................................................... 15 1 21 9.5 11.6 9.0
3....................................................... 100 71 112 5.6 6.8 5.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 76172]]
c. Rebuttable Presumption Payback
As discussed above, EPCA provides a rebuttable presumption that an
energy conservation standard is economically justified if the increased
purchase cost for a product that meets the standard is less than three
times the value of the first-year energy and water savings resulting
from the standard. In calculating a rebuttable presumption payback
period for the considered standard levels, DOE used discrete values
rather than distributions for input values, and, as required by EPCA,
based the energy and water use calculation on the DOE test procedures
for residential dishwashers. As a result, DOE calculated a single
rebuttable presumption payback value, and not a distribution of payback
periods, for each efficiency level. Table V.7 presents the rebuttable-
presumption payback periods for the considered TSLs. While DOE examined
the rebuttable-presumption criterion, it considered whether the
standard levels considered for this proposed rule are economically
justified through a more detailed analysis of the economic impacts of
those levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The results of
that analysis serve as the basis for DOE to evaluate the economic
justification for a potential standard level (thereby supporting or
rebutting the results of any preliminary determination of economic
justification).
Table V.7--Residential Dishwashers: Rebuttable PBPs
------------------------------------------------------------------------
Trial standard level
Product class --------------------------------------
1 2 3
------------------------------------------------------------------------
Standard (years)................. 3.9 7.1 4.2
Compact (years).................. ........... 3.1 2.0
------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of residential dishwashers. The
section below describes the expected impacts on manufacturers at each
TSL. Chapter 12 of the NOPR TSD explains the analysis in further
detail.
a. Industry Cash Flow Analysis Results
DOE modeled two scenarios using different markup assumptions and
two scenarios using different conversion cost assumptions for a total
of four different scenarios. Each scenario results in a unique set of
cash flows and corresponding industry value at each TSL. These
assumptions correspond to the bounds of a range of market responses
that DOE anticipates could occur in the standards case. The tables
below depict the financial impacts on manufacturers (represented by
changes in INPV) and the conversion costs DOE estimates manufacturers
would incur at each TSL. The first two tables correspond to the
scenarios using scaled estimates of the capital conversion costs from
the May 2012 direct final rule with the preservation of gross margin
markups and the preservation of EBIT markups respectively. The third
and fourth tables correspond to the scenarios using estimates of the
capital conversion from the current engineering cost model, again with
the preservation of gross margin markups and the preservation of EBIT
markups respectively. Those scenarios with the preservation of gross
margin markups reflect the lower (less severe) bound of impacts whereas
the scenarios with the preservation of EBIT markups reflect the upper
(more severe) bound of impacts.
The INPV results refer to the difference in industry value between
the base case and the standards case, which DOE calculated by summing
the discounted industry cash flows from the base year (2014) through
the end of the analysis period (2048). The discussion also notes the
difference in cash flow between the base case and the standards case in
the year before the compliance date of potential amended energy
conservation standards. This figure provides an estimate of the
required conversion costs relative to the cash flow generated by the
industry in the base case.
Table V.8--Manufacturer Impact Analysis for Residential Dishwashers--Scaled Capital Conversion Costs From the
May 2012 Direct Final Rule With the Preservation of Gross Margin Markups Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV.......................... (2013$ millions) 586.6 507.3 483.0 426.0
Change in INPV................ (2013$ millions) .............. (79.2) (103.6) (160.5)
(%)............. .............. -13.5% -17.7% -27.4%
Product Conversion Costs...... (2013$ millions) .............. 38.3 61.7 80.2
Capital Conversion Costs...... (2013$ millions) .............. 79.2 172.0 236.7
Total Conversion Costs........ (2013$ millions) .............. 117.5 233.7 316.9
----------------------------------------------------------------------------------------------------------------
Table V.9--Manufacturer Impact Analysis for Residential Dishwashers--Scaled Capital Conversion Costs From the
May 2012 Direct Final Rule With the Preservation of EBIT Markups Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV.......................... (2013$ millions) 586.6 506.1 404.2 346.8
Change in INPV................ (2013$ millions) .............. (80.5) (182.3) (239.8)
(%)............. .............. -13.7% -31.1% -40.9%
Product Conversion Costs...... (2013$ millions) .............. 38.3 61.7 80.2
[[Page 76173]]
Capital Conversion Costs...... (2013$ millions) .............. 79.2 172.0 236.7
Total Conversion Costs........ (2013$ millions) .............. 117.5 233.7 316.9
----------------------------------------------------------------------------------------------------------------
Table V.8--Manufacturer Impact Analysis for Residential Dishwashers--Capital Conversion Costs From the 2014
Engineering Cost Model With the Preservation of Gross Margin Markups Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV.......................... (2013$ millions) 586.6 543.1 465.2 445.5
Change in INPV................ (2013$ millions) .............. (43.5) (121.4) (141.1)
(%)............. .............. -7.4% -20.7% -24.0%
Product Conversion Costs...... (2013$ millions) .............. 38.3 61.7 80.2
Capital Conversion Costs...... (2013$ millions) .............. 35.4 219.7 236.1
Total Conversion Costs.... (2013$ millions) .............. 73.7 281.4 316.3
----------------------------------------------------------------------------------------------------------------
Table V.9--Manufacturer Impact Analysis for Residential Dishwashers--Capital Conversion Costs From the 2014
Engineering Cost Model With the Preservation of EBIT Markups Scenario
----------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
INPV.......................... (2013$ millions) 586.6 541.8 382.9 362.6
Change in INPV................ (2013$ millions) .............. (44.7) (203.7) (224.0)
(%)............. .............. -7.6% -34.7% -38.2%
Product Conversion Costs...... (2013$ millions) .............. 38.3 61.7 80.2
Capital Conversion Costs...... (2013$ millions) .............. 35.4 219.7 236.1
Total Conversion Costs.... (2013$ millions) .............. 73.7 281.4 316.3
----------------------------------------------------------------------------------------------------------------
Because standard residential dishwashers represent over 99 percent
of shipments in the year leading up to amended standards, changes to
this product class contribute the majority of impacts to INPV across
all TSLs analyzed in this rulemaking.
At TSL 1, DOE estimates impacts on INPV to range from -$43.5
million to -$80.5 million, or a change in INPV of -7.4 percent to -13.7
percent. At this level, industry free cash flow is estimated to
decrease by as much as 99.0 percent to $0.5 million, compared to the
base-case value of $47.3 million in the year leading up to the amended
energy conservation standards. As TSL 1 corresponds to the current
ENERGY STAR criteria for standard residential dishwashers, and these
products represent 88 percent of shipments in the year leading up to
amended standards, only a small fraction of the market is affected at
this efficiency level. In either markup scenario, the impact on INPV at
TSL 1 stems largely from the conversion costs required to switch
production lines from manufacturing baseline units to those meeting the
standards set at Efficiency Level 1 for standard residential
dishwashers.
As a large fraction of the energy used in dishwashing is associated
with heating the wash water, the design options proposed to meet this
efficiency level relate primarily to minimizing the amount of wash
water through spray-arm optimization, filter improvements, and enabling
greater control over the wash water temperature. Both of these
practices are in common use in higher efficiency platforms across the
industry and contribute to an MPC of $213.24 for standard dishwashers.
Because the industry already produces a substantial number of products
at this efficiency level, product and capital conversion costs are
limited to $73.7 million based on the engineering cost model, or $117.5
million based on the scaled conversion costs taken from the May 2012
direct final rule.
At TSL 2, DOE estimates impacts on INPV to range from -$103.6
million to -$203.7 million, or a change in INPV of -17.7 percent to -
34.7 percent. At this level, industry free cash flow is estimated to
decrease by as much as 247.1 percent to -$69.6 million, compared to the
base-case value of $47.3 million in the year leading up to the amended
energy conservation standards.
DOE expects manufacturers would make more extensive improvements to
meet TSL 2 compared to TSL 1. For standard dishwashers, these
improvements include exchanging a heated drying system for a
condensation drying system, further optimizing the hydraulic system
(extending to a redesign of both the sump and water lines and further
improvements to the filters), and incorporating a flow meter,
temperature sensor, and soil sensor to finely tune water consumption,
temperature, and the drying cycle. The component changes required to
enable these improvements contribute to an MPC of $278.44 for standard
dishwashers. For standard dishwashers, only 3.7 percent of shipments
currently meet the standards specified at TSL 2. In contrast, 51.9
percent of shipments of compact dishwashers currently meet the
standards specified at TSL 2. Because only a few standard residential
[[Page 76174]]
dishwashers currently employ these energy and water saving measures,
the product and capital conversion costs for standard dishwashers rise
to $223.9 million based on the scaled conversion costs taken from the
May 2012 direct final rule, or $249.2 million based on the engineering
cost model, as the production lines responsible for producing over 95
percent of standard product shipments would need retooling and
upgrades. For manufacturers of compact dishwashers, these investments
total $9.8 million based on the scaled conversion costs taken from the
May 2012 direct final rule, or $32.2 million based on the engineering
cost model. Accordingly, the conversion costs required to design and
produce compliant standard dishwashers contribute to the majority of
impacts on INPV at TSL 2.
At TSL 3, DOE estimates impacts on INPV to range from -141.1
million to -$239.8 million, or a change in INPV of -24.0 percent to -
40.9 percent. At this level, industry free cash flow is estimated to
decrease by as much as 274.7 percent to -$82.6 million, compared to the
base-case value of $47.3 million in the year leading up to the amended
energy conservation standards. The impact to INPV is most severe at TSL
3 as less than 1 percent of shipments in the year leading up to amended
standards meet this efficiency level. Only 0.4 percent of standard
dishwasher shipments and 37.0 percent of compact dishwasher shipments
currently meet the standards specified at TSL 3. As such, standards at
TSL 3 would affect nearly all platforms and will result in substantial
capital conversion costs associated with improvements to nearly all
production facilities. Because so few products exist at this level,
nearly all manufacturers would face complete redesigns for products to
meet this standard. Accordingly, the product conversion costs increase
to reflect this substantial research effort. The capital and product
conversion costs required to bring products into compliance rise to a
total of $316.9 million based on the scaled conversion costs taken from
the May 2012 direct final rule, or $316.3 million based on the
engineering cost model. Production lines responsible for producing over
99 percent of product shipments would need retooling and upgrades at
TSL 3. The conversion costs at TSL 3 stem from both the research
programs needed to develop such optimized products and the capital
investment required to change over production lines responsible for
producing over 99 percent of product shipments.
DOE expects manufacturers of standard residential dishwashers would
incorporate similar design options at TSL 3 as at TSL 2, extended to
include more highly optimized control strategies that would further
reduce the wash and rinse water temperatures. Although the component
changes required to enable these improvements contribute to the same
MPC of $278.44 for standard dishwashers at TSL 3 as for TSL 2, the
levels specified at TSL 3 significantly impact INPV because of the
larger conversion costs associated with developing and producing these
highly optimized products. For compact residential dishwashers, moving
from TSL 2 to TSL 3 would require significant changes to the portion of
the market that is not currently at the max- tech efficiency level.
These changes would result in a range of INPV impacts for compact
manufacturers ranging from -241 percent to -1,262 percent. Because
these impacts are attributed to manufacturers of baseline compact
residential dishwashers in the countertop configuration, DOE expects
that manufacturers would exit the market for these products at TSL 3.
b. Impacts on Employment
DOE used the GRIM to estimate the domestic labor expenditures and
number of domestic production workers in the base case and at each TSL
from 2014 to 2048. DOE used the labor content of each product and the
MPCs from the engineering analysis to estimate the total annual labor
expenditures associated with residential dishwashers sold in the United
States. Using statistical data from the most recent U.S. Census
Bureau's 2011 ``Annual Survey of Manufactures'' (ASM) and interviews
with manufacturers from the May 2012 direct final rule, DOE estimates
that 95 percent of residential dishwashers sold in the United States
are manufactured domestically and hence that portion of total labor
expenditures is attributable to domestic labor. Labor expenditures for
the manufacture of a product are a function of the labor intensity of
the product, the sales volume, and an assumption that wages in real
terms remain constant.
Using the GRIM, DOE forecasts the domestic labor expenditure for
residential dishwasher production labor in 2019 will be approximately
$290.7 million. Using the $27.17 hourly wage rate including fringe
benefits and 2,042 production hours per year per employee found in the
2011 ASM, DOE estimates there will be approximately 5,240 domestic
production workers involved in manufacturing residential dishwashers in
2019, the year in which any amended standards would go into effect. In
addition, DOE estimates that 1,250 non-production employees in the
United States will support residential dishwasher production. The
employment spreadsheet of the residential dishwasher GRIM shows the
annual domestic employment impacts in further detail.
The production worker estimates in this section cover workers only
up to the line-supervisor level who are directly involved in
fabricating and assembling dishwashers within an Original Equipment
Manufacturer (OEM) facility. Workers performing services that are
closely associated with production operations, such as material
handling with a forklift, are also included as production labor.
Additionally, the employment impacts shown are independent of the
employment impacts from the broader U.S. economy, which are documented
in chapter 13 of the NOPR TSD.
Table V.10 depicts the potential levels of production employment
that could result following amended energy conservation standards as
calculated by the GRIM. The employment levels shown reflect the
scenario in which manufacturers continue to produce the same scope of
covered products in domestic facilities and domestic production is not
shifted to lower-labor-cost countries. If all existing production were
moved outside of the United States, the expected impact to domestic
manufacturing employment would be a loss of 5,240 jobs, the equivalent
of the total base-case domestic production employment. Because there is
a risk of manufacturers evaluating sourcing decisions in response to
amended energy conservation standards, the expected impact to domestic
production employment falls between the potential increases as shown in
Table V.10, and the levels of job loss associated with all domestic
manufacturing of residential dishwashers moving outside of the United
States. The discussion below includes a qualitative evaluation of the
likelihood of negative domestic production employment impacts at the
various TSLs.
[[Page 76175]]
Table V.10--Total Number of Domestic Residential Dishwasher Production Workers in 2019
----------------------------------------------------------------------------------------------------------------
Trial standard level
Base case -----------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Total Number of Domestic Production Workers in 2019 5,240 5,252 5,426 5,485
(without changes in production locations)..............
----------------------------------------------------------------------------------------------------------------
The design options specified at some higher ELs increase the labor
content (measured in dollars) of standard residential dishwashers by as
much as 17 percent. All examined TSLs show modest gains in domestic
manufacturing employment levels provided manufacturers do not relocate
production facilities outside of the United States. However, at higher
TSLs, some of the design options analyzed greatly impact the ability of
manufacturers to make product changes within existing platforms.
Because of the higher labor content, the very large upfront capital
costs, and the fact that so few existing units meet the standards
proposed in this NOPR, some manufacturers may consider relocating some
or all of their domestic production of residential dishwashers to lower
labor cost countries.
c. Impacts on Manufacturing Capacity
Less than 5 percent of shipments of residential dishwashers already
comply with the amended energy conservation standards proposed in this
rulemaking. Not every manufacturer that ships standard residential
dishwashers offers products that meet these amended energy conservation
standards. Because manufacturers would need to make substantial
platform changes by the 2019 compliance date, many would have to run
parallel production between the announcement of the final rule and the
compliance date. This requirement may impact manufacturing capacity
during this interim period. DOE seeks additional comment on the impact
to manufacturing capacity between the issuance date and the compliance
date of any amended energy conservation standards for residential
dishwashers.
d. Impacts on Sub-Groups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate may not be adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche equipment
manufacturers, and manufacturers exhibiting a cost structure
substantially different from the industry average could be affected
disproportionately. DOE examined the potential for disproportionate
impacts on small business manufacturers, as discussed in section VI.B
of this NOPR. DOE did not identify any other manufacturer subgroups for
this rulemaking.
e. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, the combined effects of several impending regulations
may have serious consequences for some manufacturers, groups of
manufacturers, or an entire industry. Assessing the impact of a single
regulation may overlook this cumulative regulatory burden. In addition
to energy conservation standards, other regulations can significantly
affect manufacturers' financial operations. Multiple regulations
affecting the same manufacturer can strain profits and can lead
companies to abandon product lines or markets with lower expected
future returns than competing products. For these reasons, DOE conducts
an analysis of cumulative regulatory burden as part of its energy
conservation standards rulemakings.
In interviews conducted in support of the May 2012 direct final
rule, manufacturers provided comments on some of these regulations. DOE
summarized and addressed these comments in section IV.J.3 of this NOPR.
For the cumulative regulatory burden, DOE attempts to quantify or
describe the impacts of other Federal regulations that have a
compliance date within approximately 3 years of the compliance date of
this rulemaking. Most of the major regulations identified by DOE that
meet this criterion are other energy conservation standards for
products and equipment also made by manufacturers of residential
dishwashers. See chapter 12 of the NOPR TSD for the results of DOE's
analysis of the cumulative regulatory burden.
3. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings attributable to potential standards
for residential dishwashers, DOE compared the energy consumption of
those products under the base case to their anticipated energy
consumption under each TSL. Table V.11 presents DOE's projections of
the national energy savings and national water savings for each TSL
considered for residential dishwashers. The savings were calculated
using the approach described in section IV.H.1 of this NOPR.
Table V.11--Residential Dishwashers (for Standard and Compact Product Classes): Cumulative National Energy and
Water Savings (2019-2048)
----------------------------------------------------------------------------------------------------------------
Trial standard level
Savings -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Source Energy Savings (quads)................................... 0.00 1.00 2.39
FFC Energy Savings (quads)...................................... 0.01 1.06 2.53
Water Savings (trillion gallons)................................ 0.03 0.24 0.99
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \64\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of
[[Page 76176]]
benefits and costs. For this rulemaking, DOE undertook a sensitivity
analysis using 9, rather than 30, years of product shipments. The
choice of a 9-year period is a proxy for the timeline in EPCA for the
review of certain energy conservation standards and potential revision
of and compliance with such revised standards.\65\ The review timeframe
established in EPCA is generally not synchronized with the product
lifetime, product manufacturing cycles, or other factors specific to
residential dishwashers. Thus, such results are presented for
informational purposes only and are not indicative of any change in
DOE's analytical methodology. The NES sensitivity analysis results
based on a 9-year analytical period are presented in Table V.12. The
impacts are counted over the lifetime of residential dishwashers
purchased in 2019-2027.
---------------------------------------------------------------------------
\64\ U.S. Office of Management and Budget, ``Circular A-4:
Regulatory Analysis'' (Sept. 17, 2003) (Available at: http://www.whitehouse.gov/omb/circulars_a004_a-4/).
\65\ Section 325(m) of EPCA requires DOE to review its standards
at least once every 6 years, and requires, for certain products, a
3-year period after any new standard is promulgated before
compliance is required, except that in no case may any new standards
be required within 6 years of the compliance date of the previous
standards. While adding a 6-year review to the 3-year compliance
period adds up to 9 years, DOE notes that it may undertake reviews
at any time within the 6 year period and that the 3-year compliance
date may yield to the 6-year backstop. A 9-year analysis period may
not be appropriate given the variability that occurs in the timing
of standards reviews and the fact that for some consumer products,
the compliance period is 5 years rather than 3 years.
Table V.12--Residential Dishwashers (for Standard and Compact Product Classes): Cumulative National Energy and
Water Savings for Products Shipped in 2019-2027
----------------------------------------------------------------------------------------------------------------
Trial standard level
Savings -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Source Energy Savings (quads)................................... 0.00 0.27 0.68
FFC Energy Savings (quads)...................................... 0.00 0.28 0.72
Water (trillion gallons)........................................ 0.01 0.05 0.27
----------------------------------------------------------------------------------------------------------------
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV to the nation of the total costs
and savings for consumers that would result from particular standard
levels for residential dishwashers. In accordance with the OMB's
guidelines on regulatory analysis (OMB Circular A-4, section E,
September 17, 2003), DOE calculated NPV using both a 7-percent and a 3-
percent real discount rate.
Table V.13 shows the consumer NPV results for each TSL DOE
considered for residential dishwashers. The impacts are counted over
the lifetime of products purchased in 2019-2048.
Table V.13--Residential Dishwashers: Cumulative Net Present Value of Consumer Benefits for Products Shipped in
2019-2048
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Billion 2013$
----------------------------------------------------------------------------------------------------------------
3 percent....................................................... 0.15 2.14 15.7
7 percent....................................................... 0.05 0.23 5.56
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.14. The impacts are counted over the
lifetime of products purchased in 2019-2027. As mentioned previously,
such results are presented for informational purposes only and is not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V.14--Residential Dishwashers: Cumulative Net Present Value of Consumer Benefits for Products Shipped in
2019-2027
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Billion 2013$
----------------------------------------------------------------------------------------------------------------
3 percent....................................................... 0.06 0.13 4.96
7 percent....................................................... 0.03 -0.14 2.43
----------------------------------------------------------------------------------------------------------------
The above results reflect the use of a default trend to estimate
the change in price for residential dishwashers over the analysis
period (see section IV.F.1 of this NOPR). DOE also conducted a
sensitivity analysis that considered one scenario with a lower rate of
price decline than the reference case and one scenario with a higher
rate of price decline than the reference case. The results of these
alternative cases are presented in appendix 10-C of the NOPR TSD.
[[Page 76177]]
c. Impacts on Employment
DOE develops estimates of the indirect employment impacts of
potential standards on the economy in general. As discussed above, DOE
expects energy conservation standards for residential dishwashers to
reduce energy bills for consumers of those products, and the resulting
net savings to be redirected to other forms of economic activity. These
expected shifts in spending and economic activity could affect the
demand for labor. As described in section IV.N of this NOPR, DOE used
an input/output model of the U.S. economy to estimate indirect
employment impacts of the TSLs that DOE considered in this rulemaking.
DOE understands that there are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes,
where these uncertainties are reduced.
The results suggest that today's standards are likely to have
negligible impact on the net demand for labor in the economy. The net
change in jobs is so small that it would be imperceptible in national
labor statistics and might be offset by other, unanticipated effects on
employment. Chapter 16 of the NOPR TSD presents detailed results.
4. Impact on Utility or Performance of Products
Based on testing conducted in support of this proposed rule,
discussed in section IV.C.1.b, DOE concluded that the TSL proposed in
this NOPR would not reduce the utility or performance of the
residential dishwashers under consideration in this rulemaking.
Manufacturers of these products currently offer units that meet or
exceed today's standards. (42 U.S.C. 6295(o)(2)(B)(i)(IV))
5. Impact of Any Lessening of Competition
DOE has also considered any lessening of competition that is likely
to result from amended standards. The Attorney General determines the
impact, if any, of any lessening of competition likely to result from a
proposed standard, and transmits such determination to DOE, together
with an analysis of the nature and extent of such impact. (42 U.S.C.
6295(o)(2)(B)(i)(V) and (B)(ii))
DOE will transmit a copy of today's NOPR and the accompanying TSD
to the Attorney General, requesting that the DOJ provide its
determination on this issue. DOE will consider DOJ's comments on the
proposed rule in determining whether to proceed with the proposed
energy conservation standards. DOE will also publish and respond to
DOJ's comments in the Federal Register in a separate notice.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the nation's energy security, strengthens the economy, and reduces the
environmental impacts or costs of energy production. Reduced
electricity demand due to energy conservation standards is also likely
to reduce the cost of maintaining the reliability of the electricity
system, particularly during peak-load periods. As a measure of this
reduced demand, chapter 15 in the NOPR TSD presents the estimated
reduction in generating capacity for the TSLs that DOE considered in
this rulemaking.
Energy savings from amended standards for residential dishwashers
could also produce environmental benefits in the form of reduced
emissions of air pollutants and greenhouse gases associated with
electricity production. Table V.15 provides DOE's estimate of
cumulative emissions reductions to result from the TSLs considered in
this rulemaking. DOE reports annual CO2, NOX, and
Hg emissions reductions for each TSL in chapter 13 of the NOPR TSD.
Table V.15--Cumulative Emissions Reduction Estimated for Residential Dishwasher Trial Standard Levels for
Products Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Power Sector and Site Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................................... 0.2 57.9 137.5
SO2 (thousand tons)............................................. -0.4 42.4 98.1
NOX (thousand tons)............................................. 2.3 68.9 171.0
Hg (tons)....................................................... 0.0 0.1 0.3
N2O (thousand tons)............................................. 0.0 0.7 1.7
CH4 (thousand tons)............................................. 0.0 5.0 11.7
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................................... 0.1 4.0 9.7
SO2 (thousand tons)............................................. 0.0 0.5 1.2
NOX (thousand tons)............................................. 1.2 57.8 141.6
Hg (tons)....................................................... 0.0 0.0 0.0
N2O (thousand tons)............................................. 0.0 0.0 0.1
CH4 (thousand tons)............................................. 7.1 340.1 834.5
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................................... 0.3 61.9 147.2
SO2 (thousand tons)............................................. -0.4 42.9 99.4
NOX (thousand tons)............................................. 3.4 126.7 312.6
Hg (tons)....................................................... 0.0 0.1 0.3
N2O (thousand tons)............................................. 0.0 0.7 1.7
N2O (thousand tons CO2eq)*...................................... -1.2 196.9 462.3
CH4 (thousand tons)............................................. 7.0 345.1 846.2
[[Page 76178]]
CH4 (thousand tons CO2eq)*...................................... 197.3 9,663.4 23,693.2
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same GWP.
Negative values refer to an increase in emissions.
As part of the analysis for this proposed rule, DOE estimated
monetary benefits likely to result from the reduced emissions of
CO2 and NOX that DOE estimated for each of the
TSLs considered for residential dishwashers. As discussed in section
IV.L of this notice, for CO2, DOE used the most recent
values for the SCC developed by an interagency process. The four sets
of SCC values for CO2 emissions reductions in 2015 resulting
from that process (expressed in 2013$) are represented by $12.0/metric
ton (the average value from a distribution that uses a 5-percent
discount rate), $40.5/metric ton (the average value from a distribution
that uses a 3-percent discount rate), $62.4/metric ton (the average
value from a distribution that uses a 2.5-percent discount rate), and
$119/metric ton (the 95th-percentile value from a distribution that
uses a 3-percent discount rate). The values for later years are higher
due to increasing damages (emissions-related costs) as the projected
magnitude of climate change increases.
Table V.16 presents the global value of CO2 emissions
reductions at each TSL. For each of the four cases, DOE calculated a
present value of the stream of annual values using the same discount
rate as was used in the studies upon which the dollar-per-ton values
are based. DOE calculated domestic values as a range from 7 percent to
23 percent of the global values, and these results are presented in
chapter 14 of the NOPR TSD.
Table V.16--Estimates of Global Present Value of CO2 Emissions Reduction for Residential Dishwasher Trial
Standard Levels
----------------------------------------------------------------------------------------------------------------
SCC Case*
---------------------------------------------------------------
TSL 3% discount
5% discount 3% discount 2.5% discount rate, 95th
rate, average rate, average rate, average percentile
----------------------------------------------------------------------------------------------------------------
Million 2013$
----------------------------------------------------------------------------------------------------------------
Site and Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 1.7 7.7 12.1 23.9
2............................................... 400.3 1,849.1 2,936.9 5,724.7
3............................................... 901.5 4,245.7 6,772.6 13,138.4
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 0.5 2.4 3.8 7.4
2............................................... 27.1 125.8 200.0 389.8
3............................................... 62.4 296.1 473.1 917.1
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
1............................................... 2.3 10.1 15.9 31.3
2............................................... 427.4 1,974.9 3,136.9 6,114.5
3............................................... 963.8 4,541.8 7,245.7 14,056.0
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.0, $40.5, $62.4, and $119
per metric ton (2013$).
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed on
reducing CO2 emissions in this rulemaking is subject to
change. DOE, together with other Federal agencies, will continue to
review various methodologies for estimating the monetary value of
reductions in CO2 and other GHG emissions. This ongoing
review will consider the comments on this subject that are part of the
public record for this and other rulemakings, as well as other
methodological assumptions and issues. However, consistent with DOE's
legal obligations, and taking into account the uncertainty involved
with this particular issue, DOE has included in this proposed rule the
most recent values and analyses resulting from the interagency process.
DOE also estimated the cumulative monetary value of the economic
benefits associated with NOX emissions reductions
anticipated to result from amended standards for residential
dishwashers. The dollar-per-ton values that DOE used are discussed in
section IV.L of this notice. Table V.17 presents the cumulative present
values for each TSL calculated using 7-percent and 3-percent discount
rates.
[[Page 76179]]
Table V.17--Estimates of Present Value of NOX Emissions Reduction Under
Residential Dishwashers Trial Standard Levels
------------------------------------------------------------------------
3% discount 7% discount
TSL rate rate
------------------------------------------------------------------------
Million 2013$ *
------------------------------------------------------------------------
Power Sector and Site Emissions
------------------------------------------------------------------------
1....................................... 3.2 1.6
2....................................... 95.5 44.4
3....................................... 221.4 98.5
------------------------------------------------------------------------
Upstream Emissions
------------------------------------------------------------------------
1....................................... 1.7 0.8
2....................................... 77.9 34.8
3....................................... 178.9 76.9
------------------------------------------------------------------------
Total FFC Emissions
------------------------------------------------------------------------
1....................................... 4.9 2.4
2....................................... 173.3 79.2
3....................................... 400.3 175.4
------------------------------------------------------------------------
* Negative values refer to an increase in emissions.
7. Summary of National Economic Impacts
The NPV of the monetized benefits associated with emissions
reductions can be viewed as a complement to the NPV of the customer
savings calculated for each TSL considered in this rulemaking. Table
V.18 presents the NPV values that result from adding the estimates of
the potential economic benefits resulting from reduced CO2
and NOX emissions in each of four valuation scenarios to the
NPV of customer savings calculated for each TSL considered in this
rulemaking, at both a 7-percent and 3-percent discount rate. The
CO2 values used in the columns of each table correspond to
the four sets of SCC values discussed above.
Table V.18--Net Present Value of Customer Savings Combined With Present Value of Monetized Benefits From CO2 and
NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
Customer NPV at 3% discount rate added with:
---------------------------------------------------------------------------
SCC case $12.0/ SCC case $40.5/ SCC case $62.4/ SCC case $119/
TSL metric ton CO2* metric ton CO2* metric ton CO2* metric ton CO2*
and medium value and medium value and medium value and medium value
for NOX for NOX for NOX for NOX
----------------------------------------------------------------------------------------------------------------
Billion 2013$
----------------------------------------------------------------------------------------------------------------
1................................... 0.2 0.2 0.2 0.2
2................................... 2.7 4.3 5.5 8.4
3................................... 17.1 20.6 23.3 30.2
----------------------------------------------------------------------------------------------------------------
Customer NPV at 7% discount rate added with:
---------------------------------------------------------------------------
SCC case $12.0/ SCC case $40.5/ SCC case $62.4/ SCC case $119/
TSL metric ton CO2* metric ton CO2* metric ton CO2* metric ton CO2*
and medium value and medium value and medium value and medium value
for NOX for NOX for NOX for NOX
----------------------------------------------------------------------------------------------------------------
Billion 2013$
----------------------------------------------------------------------------------------------------------------
1................................... 0.1 0.1 0.1 0.1
2................................... 0.7 2.3 3.4 6.4
3................................... 6.7 10.3 13.0 19.8
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.0, $40.5, $62.4, and $119
per metric ton (2013$).
Although adding the value of customer savings to the values of
emission reductions provides a valuable perspective, two issues should
be considered. First, the national operating cost savings are domestic
U.S. customer monetary savings that occur as a result of market
transactions, while the value of CO2 reductions is based on
a global value. Second, the assessments of operating cost savings and
the SCC are performed with different methods that use different time
frames for analysis. The national operating cost savings is measured
for the lifetime of equipment shipped in 2019 to 2048. The SCC values,
on the other hand, reflect the present value of future climate-related
impacts resulting from the emission of one metric ton of CO2
in each year. These impacts continue well beyond 2100.
8. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) DOE
did not consider any other factors for this NOPR.
C. Conclusion
When considering proposed standards, the new or amended energy
conservation standard that DOE adopts for any type (or class) of
covered product must be designed to achieve the maximum improvement in
energy efficiency that the Secretary determines is technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In
determining whether a standard is economically justified, the Secretary
must determine whether the benefits of the standard exceed its burdens,
considering to the greatest extent practicable the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
amended standard must also result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
The Department considered the impacts of standards at each TSL,
beginning with a maximum technologically feasible level, to determine
whether that level was economically justified. Where the max-tech level
was not justified, DOE then
[[Page 76180]]
considered the next most efficient level and undertook the same
evaluation until it reached the highest efficiency level that is both
technologically feasible and economically justified and saves a
significant amount of energy.
To aid the reader as DOE discusses the benefits and/or burdens of
each trial standard level, tables present a summary of the results of
DOE's quantitative analysis for each TSL. In addition to the
quantitative results presented in the tables, DOE also considers other
burdens and benefits that affect economic justification. Those include
the impacts on identifiable subgroups of consumers, such as low-income
households and seniors, who may be disproportionately affected by a
national standard. Section IV.I of this notice presents the estimated
impacts of each TSL for these subgroups.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. This undervaluation suggests that
regulation that promotes energy efficiency can produce significant net
private gains (as well as producing social gains by, for example,
reducing pollution). There is evidence that consumers undervalue future
energy savings as a result of (1) a lack of information; (2) a lack of
sufficient salience of the long-term or aggregate benefits; (3) a lack
of sufficient savings to warrant delaying or altering purchases (for
example, an inefficient ventilation fan in a new building or the
delayed replacement of a water pump); (4) excessive focus on the short
term, in the form of inconsistent weighting of future energy cost
savings relative to available returns on other investments; (5)
computational or other difficulties associated with the evaluation of
relevant tradeoffs; and (6) a divergence in incentives (that is, renter
versus owner; builder versus purchaser). Other literature indicates
that with less than perfect foresight and a high degree of uncertainty
about the future, consumers may trade off these types of investments at
a higher than expected rate between current consumption and uncertain
future energy cost savings.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways: First, if consumers forego a
purchase of a product in the standards case, this decreases sales for
product manufacturers, and the impact on manufacturers attributed to
lost revenue is included in the MIA. Second, DOE accounts for energy
savings attributable only to products actually used by consumers in the
standards case; if a regulatory option decreases the number of products
used by consumers, this decreases the potential energy savings from an
energy conservation standard. DOE provides detailed estimates of
shipments and changes in the volume of product purchases in chapter 9
of the NOPR TSD. However, DOE's current analysis does not explicitly
control for heterogeneity in consumer preferences, preferences across
subcategories of products or specific features, or consumer price
sensitivity variation according to household income.\66\
---------------------------------------------------------------------------
\66\ P.C. Reiss and M.W. White. Household Electricity Demand,
Revisited. Review of Economic Studies (2005) 72, 853-883.
---------------------------------------------------------------------------
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE is committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy efficiency
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\67\ DOE
welcomes comments on how to more fully assess the potential impact of
energy conservation standards on consumer choice and how to quantify
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------
\67\ Alan Sanstad, Notes on the Economics of Household Energy
Consumption and Technology Choice. Lawrence Berkeley National
Laboratory. 2010. Available online at: www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf.
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for Residential Dishwashers
Table V.19 and Table V.20 summarize the quantitative impacts
estimated for each TSL for residential dishwashers. The efficiency
levels contained in each TSL are described in section V.A of this NOPR.
Table V.19--Summary of Results for Residential Dishwasher Trial Standard Levels: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Energy Savings quads
----------------------------------------------------------------------------------------------------------------
0.01 1.06 2.53
----------------------------------------------------------------------------------------------------------------
NPV of Customer Benefits 2013$ billion
----------------------------------------------------------------------------------------------------------------
3% discount rate..................... 0.1 2.1 15.7
7% discount rate..................... 0.1 0.2 5.6
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 million metric tons.............. 0.3 61.9 147.2
NOX thousand tons.................... 3.4 126.7 312.6
Hg tons.............................. 0.0 0.1 0.3
N2O thousand tons.................... 0.0 0.7 1.7
N2O thousand tons CO2eq *............ -1.2 196.9 462.3
CH4 thousand tons.................... 7.0 345.1 846.2
CH4 thousand tons CO2eq *............ 197.3 9,663.4 23,693
SO2 thousand tons.................... -0.4 42.9 99.4
----------------------------------------------------------------------------------------------------------------
[[Page 76181]]
Value of Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 2013$ million **................. 2.3 to 31.3 427.4 to 6,114.5 963.8 to 14,056
NOX_3% discount rate 2013$ million... 4.9 173.3 400.3
NOX_7% discount rate 2013$ million... 2.4 79.2 175.4
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same GWP.
** Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
emissions.
Table V.20--Summary of Results for Residential Dishwasher Trial Standard Levels: Consumer and Manufacturer
Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 *
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
----------------------------------------------------------------------------------------------------------------
Impact to Industry NPV (2013$ (43.5)-(80.5) (103.6)-(203.7) (141.1)-(239.8)
million, 8.5% discount rate)........
Industry NPV (% change).............. (7.4)-(13.7) (17.7)-(34.7) (24.0)-(40.9)
----------------------------------------------------------------------------------------------------------------
Direct Employment Impacts
----------------------------------------------------------------------------------------------------------------
Potential Increase in Domestic 12 186 245
Production Workers in 2018..........
----------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2013$)
----------------------------------------------------------------------------------------------------------------
Standard Dishwasher.................. 2 21 112
Compact Dishwasher................... n.a. 8 51
----------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
----------------------------------------------------------------------------------------------------------------
Standard Dishwasher.................. 6.1 9.0 5.3
Compact Dishwasher................... n.a. 4.5 2.9
----------------------------------------------------------------------------------------------------------------
Distribution of Consumer LCC Impacts
----------------------------------------------------------------------------------------------------------------
Standard Dishwasher..................
Net Cost (%)......................... 6% 53% 33%
Compact Dishwasher...................
Net Cost (%)......................... n.a. 9% 6%
----------------------------------------------------------------------------------------------------------------
* Parentheses indicate negative (-) values. The entry ``n.a.'' means not applicable because there is no change
in the standard at certain TSLs.
DOE first considered TSL 3, which represents the max-tech
efficiency levels. TSL 3 would save 2.53 quads of energy and 0.99
trillion gallons of water, amounts DOE considers significant. Under TSL
3, the NPV of consumer benefit would be $5.6 billion using a discount
rate of 7 percent, and $15.7 billion using a discount rate of 3
percent.
The cumulative emissions reductions at TSL 3 are 147.2 Mt of
CO2, 312.6 thousand tons of NOX, 99.4 thousand
tons of SO2, 0.3 tons of Hg, 1.7 thousand tons of
N2O, and 846.2 thousand tons of CH4. The
estimated monetary value of the CO2 emissions reductions at
TSL 3 ranges from $963.8 million to $14,056 million.
At TSL 3, the average LCC impact is a savings of $112 for standard
residential dishwashers and a savings of $51 for compact residential
dishwashers. The simple payback period is 5.3 years for standard
residential dishwashers and 2.9 years for compact residential
dishwashers. The fraction of consumers experiencing either an LCC
benefit net cost is 33 percent for standard residential dishwashers and
6 percent for compact residential dishwashers.
DOE testing suggested that manufacturers may have to consider
extending the cycle time in order to maintain cleaning performance in
dishwashers with reduced energy and water use at TSL 3. While DOE did
not modify current dishwasher designs in order to assess how long the
cycle may need to be extended in order to maintain current cleaning
performance, DOE is concerned that current dishwasher designs with TSL
3 energy and water use may result in consumer utility concerns.
At TSL 3, the projected change in INPV ranges from a decrease of
$141.1 million to a decrease of $239.8 million, equivalent to 24.0
percent and 40.9 percent, respectively. Products that meet the
efficiency standards specified by this TSL are forecast to represent
less than 1 percent of shipments in the year leading up to amended
standards. As such, manufacturers would have to redesign nearly all
products by the expected 2019 compliance date to meet demand.
Redesigning all units to meet the current max-tech efficiency levels
would require considerable capital and product conversion expenditures.
At TSL 3, the capital conversion costs total as much as $236.7 million,
2.5 times the industry annual capital expenditure in the year leading
up to amended standards. DOE estimates that complete platform redesigns
would cost the industry $80.2 million in product conversion costs.
These conversion costs largely relate to the extensive research
programs required to develop new products that meet the efficiency
standards set forth by TSL 3. These
[[Page 76182]]
costs are equivalent to 1.8 times the industry annual budget for
research and development. As such, the conversion costs associated with
the changes in products and manufacturing facilities required at TSL 3
would require significant use of manufacturers' financial reserves
(manufacturer capital pools), impacting other areas of business that
compete for these resources and significantly reducing INPV. In
addition, manufacturers could face a substantial impact on
profitability at TSL 3. Because manufacturers are more likely to reduce
their margins to maintain a price-competitive product at higher TSLs,
DOE expects that TSL 3 would yield impacts closer to the high end of
the range of INPV impacts. If the high end of the range of impacts is
reached, as DOE expects, TSL 3 could result in a net loss to
manufacturers of 40.9 percent of INPV. DOE also notes that the
significant impacts on the INPV of compact residential dishwasher
manufacturers, as discussed in V.B.2.a, would likely result in the
elimination of countertop products from the market.
The Secretary tentatively concludes that at TSL 3 for residential
dishwashers, the benefits of energy savings, water savings, positive
NPV of consumer benefits, emission reductions, and the estimated
monetary value of the CO2 emissions reductions would be
outweighed by the economic burden on some consumers, the potential
burden on all consumers from loss of product utility, and the impacts
on manufacturers, including the conversion costs and profit margin
impacts that could result in a large reduction in INPV. Consequently,
the Secretary has tentatively concluded that TSL 3 is not economically
justified.
DOE then considered TSL 2. TSL 2 would save 1.06 quads of energy
and 0.24 trillion gallons of water, amounts DOE considers significant.
Under TSL 2, the NPV of consumer benefit would be $0.2 billion using a
discount rate of 7 percent, and $2.1 billion using a discount rate of 3
percent.
The cumulative emissions reductions at TSL 2 are 61.9 Mt of
CO2, 126.7 thousand tons of NOX, 42.9 thousand
tons of SO2, 0.1 ton of Hg, 0.7 thousand tons of
N2O, and 345.1 thousand tons of CH4. The
estimated monetary value of the CO2 emissions reductions at
TSL 2 ranges from $427.4 million to $6,114.5 million.
At TSL 2, the average LCC impact is a savings of $21 for standard
residential dishwashers and a savings of $8 for compact residential
dishwashers. The simple payback period is 9.0 years for standard
residential dishwashers and 4.5 years for compact residential
dishwashers. The fraction of consumers experiencing an LCC net cost is
53 percent for standard residential dishwashers and 9 percent for
compact residential dishwashers.
At TSL 2, the projected change in INPV ranges from a decrease of
$103.6 million to a decrease of $203.7 million, decreases of 17.7
percent and 34.7 percent, respectively. Products that meet the
efficiency standards specified by this TSL represent less than 5
percent of shipments in the year leading up to amended standards. As
such, manufacturers would have to overhaul a significant fraction of
products by the 2019 compliance date to meet demand, although DOE
testing suggested that the design changes would not require extension
of the cycle time in order to maintain cleaning performance in
dishwashers at the energy and water use associated with TSL 2.
Redesigning significant component systems or developing entirely new
platforms to meet the efficiency levels specified by this TSL would
require considerable capital and product conversion expenditures. At
TSL 2, the estimated capital conversion costs total as much as $219.7
million, which is 2.3 times the industry annual capital expenditure in
the year leading up to amended standards. DOE estimates that the
redesigns necessary to meet these standards would cost the industry
$61.7 million in product conversion costs. These conversion costs
largely relate to the research programs required to develop products
that meet the efficiency standards set forth by TSL 2, and are 1.4
times the industry annual budget for research and development in the
year leading up to amended standards. As such, the conversion costs
associated with the changes in products and manufacturing facilities
required at TSL 2 would still require significant use of manufacturers'
financial reserves (manufacturer capital pools), impacting other areas
of business that compete for these resources and significantly reducing
INPV. Because manufacturers are more likely to reduce their margins to
maintain a price-competitive product at higher TSLs, DOE expects that
TSL 2 would yield impacts closer to the high end of the range of INPV
impacts as indicated by the preservation of EBIT markup scenario. If
the high end of the range of impacts is reached, as DOE expects, TSL 2
could result in a net loss of 34.7 percent in INPV to manufacturers of
residential dishwashers.
The Secretary tentatively concludes that at TSL 2 for residential
dishwashers, the benefits of energy savings, water savings, positive
NPV of consumer benefits, emission reductions, and the estimated
monetary value of the CO2 emissions reductions would
outweigh the negative impacts on some consumers and on manufacturers,
including the conversion costs that could result in a reduction in INPV
for manufacturers.
After considering the analysis and the benefits and burdens of TSL
2, the Secretary tentatively concludes that this TSL will offer the
maximum improvement in efficiency that is technologically feasible and
economically justified, and will result in the significant conservation
of energy. Therefore, DOE today proposes TSL 2 for residential
dishwashers. The proposed amended energy conservation standards for
residential dishwashers, which are a maximum allowable annual energy
use and maximum allowable per-cycle water consumption, are shown in
Table V.21.
Table V.21--Proposed Amended Energy Conservation Standards for
Residential Dishwashers
------------------------------------------------------------------------
Compliance date: May 30, 2019
-------------------------------------------
Product class Maximum annual Maximum per-cycle
energy use * water consumption
------------------------------------------------------------------------
1. Standard (>=8 place 234 kWh/year........ 3.1 gal/cycle.
settings plus 6 serving
pieces).
[[Page 76183]]
2. Compact (<8 place 203 kWh/year........ 3.1 gal/cycle.
settings plus 6 serving
pieces).
------------------------------------------------------------------------
* Annual energy use, expressed in kilowatt-hours (kWh) per year, is
calculated as: The sum of the annual standby electrical energy in kWh
and the product of (1) the representative average dishwasher use
cycles per year and (2) the sum of machine electrical energy
consumption per cycle in kWh, the total water energy consumption per
cycle in kWh, and, for dishwashers having a truncated normal cycle,
the drying energy consumption divided by 2 in kWh. A truncated normal
cycle is defined as the normal cycle interrupted to eliminate the
power-dry feature after the termination of the last rinse option.
2. Summary of Benefits and Costs (Annualized) of the Standards
The benefits and costs of today's standards can also be expressed
in terms of annualized values. The annualized monetary values are the
sum of (1) the annualized national economic value, expressed in 2013$,
of the benefits from operating products that meet the proposed
standards (consisting primarily of operating cost savings from using
less energy and water, minus increases in product purchase costs, which
is another way of representing consumer NPV), and (2) the monetary
value of the benefits of emission reductions, including CO2
emission reductions.\68\ The value of the CO2 reductions,
otherwise known as the SCC, is calculated using a range of values per
metric ton of CO2 developed by a recent interagency process.
---------------------------------------------------------------------------
\68\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2014, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(2020, 2030, etc.), and then discounted the present value from each
year to 2014. The calculation uses discount rates of 3 and 7 percent
for all costs and benefits except for the value of CO2
reductions, for which DOE used case-specific discount rates, as
shown in Table V.22. Using the present value, DOE then calculated
the fixed annual payment over a 30-year period, starting in the
compliance year, that yields the same present value.
---------------------------------------------------------------------------
Although combining the values of operating savings and
CO2 reductions provides a useful perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions, while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and SCC are performed with different methods that use quite
different time frames for analysis. The national operating cost savings
is measured for the lifetime of products shipped in 2019-2048. The SCC
values, on the other hand, reflect the present value of all future
climate-related impacts resulting from the emission of one ton of
carbon dioxide in each year. These impacts continue well beyond 2100.
Table V.22 shows the annualized values for residential dishwashers
under TSL 2, expressed in 2013$. The results under the primary estimate
are as follows. Using a 7-percent discount rate for benefits and costs
other than CO2 reductions, for which DOE used a 3-percent
discount rate along with the SCC series corresponding to a value of
$40.5/ton in 2015 (in 2013$), the cost of the standards for residential
dishwashers in today's rule is $413 million per year in increased
equipment costs, while the annualized benefits are $437 million per
year in reduced equipment operating costs, $113 million in
CO2 reductions, and $8.37 million in reduced NOX
emissions. In this case, the net benefit amounts to $146 million per
year. Using a 3-percent discount rate for all benefits and costs and
the SCC series corresponding to a value of $40.5/ton in 2015 (in
2013$), the cost of the standards for residential dishwashers in
today's rule is $406 million per year in increased equipment costs,
while the benefits are $529 million per year in reduced operating
costs, $113 million in CO2 reductions, and $9.95 million in
reduced NOX emissions. In this case, the net benefit amounts
to $246 million per year.
Table V.22--Annualized Benefits and Costs of Proposed Amended Standards (TSL 2) for Residential Dishwashers Sold
in 2019-2048
----------------------------------------------------------------------------------------------------------------
Million 2013$/year
-----------------------------------------------------------
Discount rate Low net benefits High net benefits
Primary estimate * estimate * estimate *
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings. 7%................ 437............... 388............... 506.
3%................ 529............... 462............... 624.
CO2 Reduction at $12.0/t **..... 5%................ 34................ 30................ 39.
CO2 Reduction at $40.5/t **..... 3%................ 113............... 100............... 131.
CO2 Reduction at $62.4/t **..... 2.5%.............. 165............... 146............... 191.
CO2 Reduction at $119/t **...... 3%................ 351............... 311............... 406.
NOX Reduction at $2,684/t....... 7%................ 8.37.............. 7.53.............. 9.49.
3%................ 9.95.............. 8.86.............. 11.43.
Total [dagger].................. 7% plus CO2 range. 479 to 796........ 425 to 706........ 555 to 921.
7%................ 558............... 496............... 647.
3% plus CO2 range. 572 to 890........ 501 to 782........ 674 to 1,041.
3%................ 652............... 572............... 766.
[[Page 76184]]
Costs
----------------------------------------------------------------------------------------------------------------
Consumer Incremental Product 7%................ 413............... 468............... 371.
Costs.
3%................ 406............... 465............... 361.
----------------------------------------------------------------------------------------------------------------
Total Net Benefits
----------------------------------------------------------------------------------------------------------------
Total [dagger].................. 7% plus CO2 range. 66 to 383......... -43 to 238........ 183 to 550.
7%................ 146............... 28................ 275.
3% plus CO2 range. 167 to 484........ 36 to 317......... 313 to 680.
3%................ 246............... 106............... 405.
----------------------------------------------------------------------------------------------------------------
* The results include benefits to consumers which accrue after 2048 from the dishwashers purchased from 2019
through 2048. Costs incurred by manufacturers, some of which may be incurred prior to 2019 in preparation for
the rule, are not directly included, but are indirectly included as part of incremental equipment costs. The
extent of the costs and benefits will depend on the projected price trends of dishwashers, as the consumer
demand for dishwashers is a function of dishwasher prices. The Primary, Low Benefits, and High Benefits
Estimates utilize forecasts of energy prices and housing starts from the AEO 2014 Reference case, Low
Estimate, and High Estimate, respectively. In addition, incremental product costs reflect a medium decline
rate for projected product price trends in the Primary Estimate, a low decline rate in the Low Benefits
Estimate, and a high decline rate in the High Benefits Estimate. The methods used to derive projected price
trends are explained in section IV.H.2.a of this notice.
** The CO2 values represent global values (in 2013$) of the social cost of CO2 emissions in 2013 under several
scenarios. The values of $12.0, $40.5, and $62.4 per ton are the averages of SCC distributions calculated
using 5%, 3%, and 2.5% discount rates, respectively. The value of $119 per ton represents the 95th percentile
of the SCC distribution calculated using a 3% discount rate.
[dagger] Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount
rate, which is $40.5/ton in 2015 (in 2013$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2
range,'' the operating cost and NOX benefits are calculated using the labeled discount rate, and those values
are added to the full range of CO2 values.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' requires each agency to identify the problem that it intends
to address, including, where applicable, the failures of private
markets or public institutions that warrant new agency action, as well
as to assess the significance of that problem. 58 FR 51735 (Oct. 4,
1993). The problems that today's standards address are as follows.
(1) There is a lack of consumer information and/or information
processing capability about energy efficiency opportunities in the
residential dishwasher market.
(2) There is asymmetric information (one party to a transaction has
more and better information than the other) and/or high transactions
costs (costs of gathering information and effecting exchanges of goods
and services).
(3) There are external benefits resulting from improved energy
efficiency of residential dishwashers that are not captured by the
users of such equipment. These benefits include externalities related
to environmental protection and energy security that are not reflected
in energy prices, such as reduced emissions of greenhouse gases.
In addition, DOE has determined that today's regulatory action is a
``significant regulatory action'' under Executive Order 12866. DOE
presented to the Office of Information and Regulatory Affairs (OIRA) in
the OMB for review the draft rule and other documents prepared for this
rulemaking, including a regulatory impact analysis (RIA), and has
included these documents in the rulemaking record. The assessments
prepared pursuant to Executive Order 12866 can be found in the
technical support document for this rulemaking.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011. 76 FR 3281 (Jan. 21, 2011). EO 13563
is supplemental to and explicitly reaffirms the principles, structures,
and definitions governing regulatory review established in Executive
Order 12866. To the extent permitted by law, agencies are required by
Executive Order 13563 to: (1) Propose or adopt a regulation only upon a
reasoned determination that its benefits justify its costs (recognizing
that some benefits and costs are difficult to quantify); (2) tailor
regulations to impose the least burden on society, consistent with
obtaining regulatory objectives, taking into account, among other
things, and to the extent practicable, the costs of cumulative
regulations; (3) select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity); (4) to the extent
feasible, specify performance objectives, rather than specifying the
behavior or manner of compliance that regulated entities must adopt;
and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public.
DOE emphasizes as well that Executive Order 13563 requires agencies
to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible. In its
guidance, the Office of Information and Regulatory Affairs has
emphasized that such techniques may include identifying changing future
compliance costs that might result from technological innovation or
anticipated behavioral changes. For the reasons stated in the preamble,
DOE believes that today's NOPR is consistent with these principles,
including the requirement that, to the extent permitted by law,
benefits justify costs and that net benefits are maximized.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act requires preparation of an initial
regulatory flexibility analysis (IRFA) for any rule that by law must be
proposed
[[Page 76185]]
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. (5 U.S.C. 601 et seq.) As
required by Executive Order 13272, ``Proper Consideration of Small
Entities in Agency Rulemaking'' 67 FR 53461 (Aug. 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. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (http://energy.gov/gc/office-general-counsel).
For manufacturers of residential dishwashers, the Small Business
Administration (SBA) has set a size threshold, which defines those
entities classified as ``small businesses'' for the purposes of the
statute. DOE used the SBA's small business size standards to determine
whether any small entities would be subject to the requirements of the
rule. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 53533,
53544 (Sept. 5, 2000) and codified at 13 CFR part 121. The size
standards are listed by North American Industry Classification System
(NAICS) code and industry description and are available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
Residential dishwasher manufacturing is classified under NAICS 335228,
``Other Major Household Appliance Manufacturing.'' The SBA sets a
threshold of 500 employees or less for an entity to be considered as a
small business for this category.
To estimate the number of small businesses which could be impacted
by the amended energy conservation standards, DOE conducted a market
survey using all available public information to identify potential
small manufacturers. To identify small business manufacturers, DOE
surveyed the May 2012 direct final rule for residential dishwasher
energy conservation standards, the AHAM membership directory, several
product databases (DOE's Compliance Certification Database, CEC, and
ENERGY STAR databases) and individual company Web sites. DOE screened
out companies that did not themselves manufacture products covered by
this rulemaking, did not meet the definition of a ``small business,''
or are foreign owned and operated.
Approximately half of the total domestic market for residential
dishwashers is manufactured in the United States by one corporation.
Together, this manufacturer and three other manufacturers do not meet
the definition of a small business manufacturer and comprise 99 percent
of the residential dishwasher market. The small portion of the
remaining residential dishwasher market (approximately 69,000 units) is
supplied by a combination of approximately 20 companies, all of which
have small market shares. All of these companies are either foreign-
owned and operated, re-brand dishwashers manufactured by other
companies, or exceed the SBA's employment threshold for consideration
as a small business under the appropriate NAICS code. Therefore, DOE
did not identify any domestic small business manufacturers of
residential dishwashers.
Based on the discussion above, DOE certifies that the standards for
residential dishwashers set forth in this proposed 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. DOE will transmit this certification to
the SBA as required by 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
Manufacturers of residential dishwashers must certify to DOE that
their products comply with any applicable energy conservation
standards. In certifying compliance, manufacturers must test their
products according to the DOE test procedures for residential
dishwashers, including any amendments adopted for those test
procedures. DOE has established regulations for the certification and
recordkeeping requirements for all covered consumer products and
commercial equipment, including residential dishwashers. 76 FR 12422
(Mar. 7, 2011). The collection-of-information requirement for the
certification and recordkeeping is subject to review and approval by
OMB under the Paperwork Reduction Act (PRA). This requirement has been
approved by OMB under OMB control number 1910-1400. Public reporting
burden for the certification is estimated to average 20 hours per
response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act (NEPA) of 1969,
DOE has determined that the proposed rule fits within the category of
actions included in Categorical Exclusion (CX) B5.1 and otherwise meets
the requirements for application of a CX. See 10 CFR part 1021,
appendix B, B5.1(b); 1021.410(b) and appendix B, B(1)-(5). The proposed
rule fits within the category of actions because it is a rulemaking
that establishes energy conservation standards for consumer products or
industrial equipment, and for which none of the exceptions identified
in CX B5.1(b) apply. Therefore, DOE has made a CX determination for
this rulemaking, and DOE does not need to prepare an Environmental
Assessment or Environmental Impact Statement for this proposed rule.
DOE's CX determination for this proposed rule is available at http://cxnepa.energy.gov/.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' imposes certain requirements
on Federal agencies formulating and implementing policies or
regulations that preempt State law or that have Federalism
implications. 64 FR 43255 (Aug. 10, 1999). 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. EPCA governs and
prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of today's proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No
further action is required by Executive Order 13132.
[[Page 76186]]
F. Review Under 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,'' imposes on Federal 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. 61 FR
4729 (Feb. 7, 1996). 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 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 proposed rule
meets the relevant standards of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector (Pub. L. 104-4, sec. 201, as codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect small governments. On March 18, 1997,
DOE published a statement of policy on its process for
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy
statement is also available at http://energy.gov/gc/office-general-counsel.
Although today's proposed rule does not contain a Federal
intergovernmental mandate, it may require expenditures of $100 million
or more on the private sector. Specifically, the proposed rule will
likely result in a final rule that could require expenditures of $100
million or more. Such expenditures may include: (1) Investment in
research and development and in capital expenditures by residential
dishwashers manufacturers in the years between the final rule and the
compliance date for the new standards, and (2) incremental additional
expenditures by consumers to purchase higher-efficiency residential
dishwashers, starting at the compliance date for the applicable
standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this NOPR and the ``Regulatory
Impact Analysis'' section of the TSD for this proposed rule respond to
those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the proposed rule unless DOE publishes
an explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(g)
and (o), today's proposed rule would establish energy conservation
standards for residential dishwashers that are designed to achieve the
maximum improvement in energy efficiency that DOE has determined to be
both technologically feasible and economically justified. A full
discussion of the alternatives considered by DOE is presented in the
``Regulatory Impact Analysis'' section of the TSD for this proposed
rule.
H. Review Under the 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 rulemaking would 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.
I. Review Under Executive Order 12630
DOE has determined, under Executive Order 12630, ``Governmental
Actions and Interference with Constitutionally Protected Property
Rights'' 53 FR 8859 (Mar. 18, 1988), that this regulation would not
result in any takings that might require compensation under the Fifth
Amendment to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act of 2001 provides for Federal agencies to review most disseminations
of information to the public under guidelines established by each
agency pursuant to general guidelines issued by OMB. (44 U.S.C. 3516,
note) OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002),
and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE
has reviewed today's NOPR under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' requires
Federal agencies to prepare and submit to OIRA at OMB, a Statement of
Energy Effects for any proposed significant energy action. 66 FR 28355
(May 22, 2001). A ``significant energy action'' is defined as any
action by an agency that promulgates 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
[[Page 76187]]
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.
DOE has tentatively concluded that today's regulatory action, which
sets forth energy conservation standards for residential dishwashers,
is not a significant energy action because the proposed standards are
not likely to have a significant adverse effect on the supply,
distribution, or use of energy, nor has it been designated as such by
the Administrator at OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects on the proposed rule.
L. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (OSTP), issued its Final Information
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14,
2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as scientific information the
agency reasonably can determine will have, or does have, a clear and
substantial impact on important public policies or private sector
decisions. 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site:
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.
VII. Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this proposed
rule. If you plan to attend the public meeting, please notify Ms.
Brenda Edwards at (202) 586-2945 or [email protected]. As
explained in the ADDRESSES section, foreign nationals visiting DOE
Headquarters are subject to advance security screening procedures.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=106. Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the public meeting. Such persons may submit requests, along with an
advance electronic copy of their statement in PDF (preferred),
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to
the appropriate address shown in the ADDRESSES section at the beginning
of this proposed rule. The request and advance copy of statements must
be received at least one week before the public meeting and may be
emailed, hand-delivered, or sent by mail. DOE prefers to receive
requests and advance copies via email. Please include a telephone
number to enable DOE staff to make follow-up contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with section 336 of EPCA. (42 U.S.C.
6306) A court reporter will be present to record the proceedings and
prepare a transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the public meeting. After the public meeting, interested parties may
submit further comments on the proceedings as well as on any aspect of
the rulemaking until the end of the comment period.
The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this rulemaking. Each participant will be allowed
to make a general statement (within time limits determined by DOE),
before the discussion of specific topics. DOE will allow, as time
permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to this rulemaking. The official conducting the public
meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this proposed rule. In addition, any person may buy a copy of the
transcript from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this proposed rule.
Submitting comments via regulations.gov. The regulations.gov Web
page will require you to provide your name and contact information.
Your contact information will be viewable to DOE Building Technologies
staff only. Your contact information will not be publicly viewable
except for your first and last names, organization name
[[Page 76188]]
(if any), and submitter representative name (if any). If your comment
is not processed properly because of technical difficulties, DOE will
use this information to contact you. If DOE cannot read your comment
due to technical difficulties and cannot contact you for clarification,
DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to regulations.gov information for which disclosure
is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through regulations.gov cannot
be claimed as CBI. Comments received through the Web site will waive
any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section
below.
DOE processes submissions made through regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or mail.
Comments and documents submitted via email, hand delivery, or mail also
will be posted to regulations.gov. If you do not want your personal
contact information to be publicly viewable, do not include it in your
comment or any accompanying documents. Instead, provide your contact
information in a cover letter. Include your first and last names, email
address, telephone number, and optional mailing address. The cover
letter will not be publicly viewable as long as it does not include any
comments
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via mail or hand
delivery/courier, please provide all items on a CD, if feasible. It is
not necessary to submit printed copies. No facsimiles (faxes) will be
accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. According to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery/courier two well-marked copies:
one copy of the document marked confidential including all the
information believed to be confidential, and one copy of the document
marked non-confidential with the information believed to be
confidential deleted. Submit these documents via email or on a CD, if
feasible. DOE will make its own determination about the confidential
status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE requests comment on the efficiency levels selected for its
analysis. Specifically, DOE requests feedback on whether cleaning
performance or any other consumer utility is affected at any of the
analyzed efficiency levels.
2. DOE requests comment on the estimated MPCs for each of the
analyzed efficiency levels. DOE seeks input on what design options
manufacturers are likely to incorporate into residential dishwashers at
each of the analyzed efficiency levels, and their associated costs.
3. DOE requests comment on what impact, if any, the proposed energy
conservation standards would have on domestic manufacturing facilities
and their associated employment. DOE requests information on whether
domestic manufacturers would move production overseas or source an
increased number of products from foreign OEMs under the proposed
standards.
4. DOE requests comment on the potential rebound effect from
setting the proposed energy conservation standards for standard-size
dishwashers and compact dishwashers. DOE requests comments on the
potential technology options identified by DOE for improving the
efficiency of residential dishwashers and its screening analysis used
to select the most viable options for consideration in setting today's
proposed standards. (see sections IV.A and B of this notice.)
5. DOE requests comment on its estimate that standards do not
impact a consumer's decision to replace or repair a failed dishwasher.
Specifically, DOE seeks any data that indicate how dishwasher replace
versus repair decisions are impacted by increased total installed cost,
increased repair cost, and energy cost savings.
6. DOE requests comment and information on the number of annual
dishwasher cycles.
7. DOE requests comment on utility issues, if any, that consumers
may face under the proposed energy conservation standards.
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's
proposed rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
[[Page 76189]]
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Reporting and recordkeeping requirements,
and Small businesses.
Issued in Washington, DC, on December 10, 2014.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons set forth in the preamble, DOE proposes to amend
part 430 of chapter II, subchapter D, of title 10 of the Code of
Federal Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
Sec. 430.3 [Amended]
0
2. Section 430.3 is amended by:
0
a. Removing paragraph (h)(2);
0
b. Redesignating paragraphs (h)(3) through (7) as (h)(2) through (6),
respectively; and
0
c. Removing ``C1'' from redesignated paragraph (h)(2) and adding ``C''
in its place.
Appendix C to Subpart B of Part 430--[Removed]
0
3. Appendix C to subpart B of part 430 is removed.
Appendix C1 to Subpart B of Part 430--[Redesignated as Appendix C
Subpart B of Part 430]
0
4. Appendix C1 to subpart B of part 430 is redesignated as appendix C
to subpart B of part 430.
0
5. In Sec. 430.32 add paragraph (f)(4) to read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(f) * * *
(4) All dishwashers manufactured on or after [Date 3 years after
the publication in the Federal Register of the final rule] shall meet
the following standard--
(i) Standard size dishwashers shall not exceed 234 kwh/year and 3.1
gallons per cycle.
(ii) Compact size dishwashers shall not exceed 203 kwh/year and 3.1
gallons per cycle.
* * * * *
[FR Doc. 2014-29519 Filed 12-18-14; 8:45 am]
BILLING CODE 6450-01-P