### Department of Energy Washington, DC 20585

March 7, 1996MEMORANDUM FOR WORKSHOP PARTICIPANTSFROM: Energy Efficiency and Renewable Energy CHRISTINE A. ER Assistant Secretary
SUBJECT: APPLIANCE STANDARDS PROCESS IMPROVEMENT WORKSHOP March 19-20, 1996 New Location: Washington National Airport Hilton at Crystal City, 2399 Jefferson Davis Highway, Arlington Virginia 22202, (703)418-6800 Attached you will find preliminary materials for a public workshop to be held on March 19-20, 1996. This meeting is another effort by the Department of Energy to engage in a dialogue with stakeholders on a series of preliminary findings concerning ways of improving our rulemaking program for appliance standards. The "Major Themes" document enclosed is the result of extensive contacts with stakeholders representing appliance manufacturers, energy efficiency advocates, states, utilities and others. Based on our work to date and input from this workshop, we expect to announce several initiatives in April. We believe useful changes can, and should be made to the way that the Department determines and sets appliance efficiency standards. Please note that the site has been changed to the Decatur and Farragut Rooms of the Washington National Airport Hilton in Crystal City, 2399 Jefferson Davis Highway, Arlington, VA 22022 to accommodate the large number of participants who plan to attend. We look forward to your participation and input.

Enclosures : "Major Themes" Document

Meeting Agenda Outline of Agenda Elements

•s *,. i^ Printed with soy ink on recycled paper 

### Department of Energy Washington, DC 20585

MEMORANDUMFORWORKSHOP PARTICIPANTS'(}f FROM: CHRISTINE A. ER''u

# I.I~ Assistant Secretary •

# CV\A Energy Efficiency and Renewable Energy March 7, 1996

SUBJECT: APPLL\NCESTANDARDSPROCESSIMPROVEMENT WORKSHOP March 19-20, 1996 NewLocation: Washington NationalAirport Hilton at Crystal City, 2399 Jefferson Davis Highway,ArlingtonVirginia 22202, (703)418-6800 Attachedyou will find preliminary materials for a public workshop to be held on March 19-20, 1996. This meeting is anothereffort by the Department ofEnergy to engage in a dialogue with stakeholders on a series ofpreliminary findings concerning ways ofimproving our rulemaking program for appliance standards. The "MajorThemes" document enclosed is the result ofextensivecontacts with stakeholders representing appliance manufacturers, energy efficiency advocates, states, utilities and others. Based on ourworkto date and inputfrom this workshop, we expectto announce several initiatives in April. Webelieve useful changes can, and shouldbe made to the way that the Department determines and sets appliance efficiency standards. Please notethatthe sitehas been changedto the DecaturandFarragutRooms ofthe Washington NationalAirportHilton in Crystal City, 2399 Jefferson Davis Highway, Arlington,VA 22022to accommodate the large number ofparticipants whoplan to attend. We lookforward to yourparticipation and input.

Enclosures: "MajorThemes" Document Meeting Agenda Outline ofAgendaElements 

# *

Printed with soy ink on recycled paperPUBLIC WORKSHOP ON THE IMPROVEMENT OF THE APPLIANCE STANDARDS RULEMAKING PROCESS March 19-20, 1996 Proposed Agenda Tuesday, March 19, 1996 9:00 A.M. - 4:30 P.M. ° Welcoming Remarks by Assistant Secretary Christine Ervin Presentation: "Major Themes" of the Ad Hoc Committee's Improvement Effort - Question and Answer - More Detailed Comment and Discussion Period Presentation: DOE's "Proposed Changes" based on the Outcomes of the Process Improvement Effort (Ad Hoc Committee's work) Overview by Assistant Secretary Ervin - Detailed Presentation by Michael McCabe (DOE, Codes and Standards) and Mark Friedrichs (DOE, Policy) - Question and Answer and Discussion Period • Additional Input and Improvements Small Group Discussions on DOE's Proposed Changes • Report back and Discussion on Small Group Outputs • Closing Discussion Wednesday, March 20th 9:00 A
.M. - 1:00 P.M. • Overview Presentation: How DOE Intends to Address the Analytic Issues raised by the Process Improvement Effort - Question and Answer and Discussion Period Small Group Discussion: How to Improve DOE's Proposed Approach to: - Manufacturer Impact Analysis - Engineering Analysis - Regulatory Impact Analysis • Report back and Discussion on Small Group Outputs • Overview Presentation/Discussion: How DOE intends to make the Transition from the Existing Structure to the New Structure • Small Group Discussion: How to Improve DOE's Approach to the Transition from a Product Sector Point of View: - Electrical Products - HVAC and Water Heating Equipment - Plumbing Products - White Goods • Report Back on Key Transition Issues from Sectoral Perspectives • Closing Discussion It

It

It

It

It



## ..

It PUBLIC WORKSHOP ON THE IMPROVEMENT OF THE APPLIANCE STANDARDS RULEMAKING PROCESS March 19-20, 1996

Proposed Agenda Tuesday, March 19, 1996

9:00 A.M.

- 4:30 P.M. Welcoming Remarks by Assistant Secretary Christine Ervin Presentation: "MajorThemes" ofthe Ad Hoc Committee's Improvement Effort

- Question and Answer

- More Detailed Comment and Discussion Period Presentation: DOE's "Proposed Changes" based on the Outcomes ofthe Process Improvement Effort (Ad Hoc Committee's work)

- Overview by Assistant Secretary Ervin

- Detailed Presentation by Michael McCabe (DOE, Codes and Standards) and Mark Friedrichs (DOE,Policy)

- Question and Answer and Discussion Period Additional Input and Improvements Small Group Discussions on DOE's Proposed Changes Report back and Discussion on Small Group Outputs Closing Discussion Wednesday, March 20th 9:00 A.M.

- 1:00 P.M.

It Overview Presentation: How DOEIntends to Address the Analytic Issues raised by the
.

It

It

It

It

It



## .. Process ImprovementEffort

- Question and Answer and Discussion Period Small Group Discussion: How to Improve DOE's Proposed Approach to:

- Manufacturer ImpactAnalysis

- Engineering Analysis

- Regulatory ImpactAnalysis Report back and Discussion on Small Group Outputs Overview Presentation/Discussion: How DOE intends to make the Transition from the Existing Structure to the New Structure Small Group Discussion: How to Improve DOE'sApproach to theTransition from a Product Sector PointofView:

- Electrical Products

- HVACand WaterHeating Equipment

- Plumbing Products

- White Goods Report Back on KeyTransition Issues from Sectoral Perspectives Closing DiscussionAPPLIANCE STANDARDS PROCESS IMPROVEMENT WORKSHOP March 19

-20, 1996 Outline of Agenda Elements

A. "MAJOR THEMES" OF STAKEHOLDER CONSULTATIONS 4 Prioritization of rulemakings is a fundamental means of improving the efficacy of the rulemaking program; 4 More participation by stakeholders in all stages, and particularly the early stages, of the standards setting process is required; 4 Better evaluation of the impact of standards on manufactures may require substantial revisions to the current analysis methodologies and qualitative criteria; 4 The use of technical experts and extensive peer review would be valuable in developing the engineering analysis; 4 "Technology forcing" proposed standards can-cause substantial manufacturer dislocation and is the subject of controversial debate; 4 Variations in regional energy costs, climate conditions and appliance usage patterns cause varying impacts on consumers.
B. DRAFT PROCESS IMPROVEMENT In response to stakeholder issues identified in the "Major Themes" document, DOE has prepared a draft process improvement plan that will be presented for comment on the first day of the workshop. The major objectives of the process improvement plan are: 4 Early involvement of stakeholders 4 Increased predictability of the rulemaking timetable 4 Increased use of industry expertise 4 Earlier elimination of impractical or problematic design options 4 Greater consideration of alternatives to standards 4 Increased attention to impacts 4 Improved analytical methods APPLIANCE STANDARDS PROCESS IMPROVEMENTWORKSHOP March 19-20, 1996 OutlineofAgendaElements

A. "MAJORTHEMES" OF STAKEHOLDER CONSULTATIONS
-¢>- Prioritization ofrulemakings is a fundamental means ofimproving the efficacy of the rulemaking program; -¢>- More participation by stakeholders in all stages, and particularly the early stages, of the standards setting process is required; -¢>- Betterevaluation ofthe impact ofstandards on manufactures may require substantial revisions to the current analysis methodologies and qualitative criteria; -¢>- The use oftechnical experts and extensive peerreview would be valuable in developing the engineering analysis; -¢>- "Technology forcing" proposed standards can·cause substantial manufacturer dislocation and is the subject ofcontroversial debate; -¢>- Variations in regional energy costs, climate conditions and appliance usage patterns cause varying impacts on consumers.
B. DRAFTPROCESS IMPROVEMENT In response to stakeholder issues identified in the "MajorThemes" document, DOE has prepared a draftprocess improvementplan that will be presented for commenton the first day ofthe workshop. The major objectives ofthe process improvementplan are: -¢>- Early involvement ofstakeholders -¢>- Increasedpredictability ofthe rulemaking timetable -¢>- Increased use ofindustry expertise -¢>- Earlierelimination ofimpractical orproblematic design options -¢>- Greater consideration ofalternatives to standards -¢>- Increased attention to impacts -¢>- Improved analytical methodsC. COOPERATIVE DEVELOPMENT OF NEW ANALYTICAL APPROACHES

DOE intends to initiate a cooperative effort with key stakeholders and qualified contractors to develop improved methods for analyzing the likely impacts of standards on manufacturers and others. DOE will work in close cooperation with the stakeholders to address some of the key issues that were identified during the stakeholder consultations prior to and at the March workshop. DOE intends to conduct work sessions with interested parties to discuss these consultation findings and to assist in the development of new analytical approaches. Smaller breakout sessions will be held to begin developing an optimal path for conducting the cooperative development. Possible questions that may serve as points of discussion include: Manufacturing Practicality When conducting the engineering analysis of complex systems, how can we ensure that the system designs being considered represent realistic design concepts that can be manufactured? Manufacturing Cost Data When conducting the life cycle cost analysis, are there better ways to capture manufacturing, installation and maintenance costs? Uncertainty of Quantitative Analysis How can the data and results be treated to reflect the uncertainty of the numbers? Impacts on Consumers What analysis tools/methods should be used to measure the financial impact of standards on different consumer groups? Impacts on Manufacturers Should existing manufacturer impact models such as GRIM and MAM be adapted or replaced to respond to industry concerns? How can the forecasting features be improved? What consumer behavioral studies (price elasticity, etc.) should be conducted? What mechanisms will ensure appropriate treatment of "non-average" manufacturers? Can the models be adapted to consider cumulative regulatory burden? Could a more qualitative methodology be developed? C. COOPERATIVEDEVELOPMENT OF NEWANALYTICAL APPROACHES DOE intends to initiate a cooperative effort with key stakeholders and qualified contractors to develop improved methods for analyzing the likely impacts ofstandards on manufacturers and others. DOE will work in close cooperation with the stakeholders to address some ofthe key issues that were identified during the stakeholder consultations prior to and at the March workshop. DOE intends to conduct work sessions with interested parties to discuss these consultation findings and to assist in the development ofnew analytical approaches. Smallerbreakout sessions will be held to begin developing an optimal path for conducting the cooperative development. Possible questions that may serve as points of discussion include: ManufacturingPracticality When conducting the engineering analysis ofcomplex systems, how can we ensure that the system designs being considered represent realistic design concepts that can be manufactured? ManufacturingCostData When conducting the life cycle cost analysis, are there better ways to capture manufacturing, installation and maintenance costs? Uncertainty ofQuantitativeAnalysis How canthe data and results be treated to reflect the uncertainty ofthe numbers? Impacts on Consumers What analysis tools/methods should be used to measure the financial impact ofstandards on different consumer groups? Impacts onManufacturers Should existing manufacturer impact models such as GRIM and MAMbe adapted or replaced to respond to industry concerns? How can the forecasting features beimproved? Whatconsumerbehavioral studies (price elasticity, etc.) shouldbeconducted? What mechanisms will ensure appropriate treatment of"non-average" manufacturers? Can the models be adapted to consider cumulativeregulatory burden? Could a more qualitative methodology be developed?Impacts on Industry Structure

There are a number of factors which are not explicitly treated in the current analysis models that have a strong impact on the acceptance of new standards levels. The impact of standards levels on distribution channels, appliance servicing, foreign imports, patent rights, fuel switching, industry competition, job displacement, etc. is not well captured in the current analytical framework. A 'more qualitative methodology could be developed that may involve supplementing the current framework with market research, site visits, or interviews for the particular product studies. Consideration of Voluntary Programs What criteria/factors/methodologies should be considered in determining the appropriate balance between voluntary and mandatory efficiency standards for a specific appliance or product category?
D. TRANSITION TO THE IMPROVED PROCESS Until new methodologies are instituted, DOE will maintain close communication with stakeholders to keep them appraised of actions potentially of concern. DOE will summarize the current status of rulemakings and of relevant analysis. DOE will solicit the recommendations of stakeholders regarding transition issues impacting particular product categories. Impacts on Industry Structure There are a number offactors which are not explicitly treated in the current analysis models that have a strongimpacton the acceptance ofnew standards levels. The impact ofstandards levels on distribution channels, appliance servicing, foreign imports, patent rights, fuel switching, industry competition,job displacement, etc. is not well captured in the current analytical framework. A more qualitative methodology couldbe developed that may involve supplementing the current framework with marketresearch, site visits, orinterviews for the particular product studies. Consideration ofVoluntary Programs Whatcriteria/factors/methodologies should be considered in determining the appropriate balance between voluntary and mandatory efficiency standards for a specific appliance or productcategory?
D. TRANSITION TO THE IMPROVED PROCESS Until new methodologies are instituted, DOE will maintain close communication with stakeholders to keep them appraised ofactions potentially ofconcern. DOE will summarize the current status ofrulemakings and ofrelevant analysis. DOE will solicit the recommendations ofstakeholders regarding transition issues impacting particular product categories.

## Process Improvement for

Appliance Efficiency Standards Rulemaking "Major Themes" of Stakeholder Consultations March 19, 1996 DRAFT #2 Update 3-4-96 U.S. Department of Energy Christine A. Ervin Assistant Secretary Energy Efficiency and Renewable Energy Arthur D. Little, Inc. Brookman-King Collaborative Solutions, Inc. 

## Process Improvement for Appliance Efficiency Standards Rulemaking "MajorThemes" of Stakeholder Consultations March 19, 1996 DRAFT#2 Update3-4-96 U.s. Department of Energy ChristineA. Ervin Assistant Secretary Energy Efficiencyand Renewable Energy Arthur D. Little, Inc. Brookman-King Collaborative

Solutions, Inc.

### Process Improvement Agenda



## Decision Making Prioritization 

## Potential Improvements DRAFT 3-4-96

LF47603mtyO296 If 1 

## DRAFT 3-4-96 Process Improvement Agenda

iBM? 

# Background I
¥;;:;";'**tl4;;;ihd;;:;;;·;lNdU':h.'=.:.z,iS..&-~4.J..;S** ;**·£!k~@74g§)#¥** y & bPM·4k&@Wi hAA£, t Fi4l....") 

# I
i¥ 

## Process

• .m••,

# J

in} 

## Analysis

ill; 

## Decision Making 

# I SA taM 

## Prioritization 

# ,....**.'_'''~**

# I
Potential Improvements

LF47603mty0296 If

### Process Improvement Agenda



## Analysis Decision Making Prioritization 

## Potential Improvements DRAFT 3-4-96

LF47603mty0296 If 2 

## DRAFT 3-4-96 Process Improvement Agenda 

# I ; 9 

## Background 

# •....""

# ] *' &



## DeqisidnMaking Prioritization 

## liPbtentiallrTIpf(jvernents 

# I

, \ ,,1M! iIi4,ii:l\ZliiJiil,,,,,G· ",M;g ; ©J,. q.,,;.,",, .';';4 ,.;:w;;:;;;;w;; ,4 ,;.' " ,44iiii JA i hi ··4,·

LF47603mty0296 If 2

## DRAFT 3-4-96

Process Improvement Background Stakeholder Participation 

## The Department of Energy is committed to enhancing the standards setting process in conjunction with appliance manufacturers , energy efficiency advocates, states, utilities, and other interested parties. • Since Vice President Gore's National Performance Review recommendations were issued on September 7, 1993, DOE has used new approaches in carrying out its rulemaking responsibilities in the area of energy conservation standards. Whenever possible DOE has invited early stakeholder participation in the development of rulemaking proposals and encouraged `interested parties" to work towards agreement-based proposals. • In recent rulemakings the department engaged in a wide range of consensus-building mechanisms-such as technical sessions, workshops and an agreement-based process-to supplement the traditional rulemaking proceeding.

LF47603mty0296 If 

## DRAFT 3-4-96 Process Improvement Background StakeholderParticipation 

## The Department of Energy is committed to enhancing the standards setting process in conjunction with appliance manufacturers, energy efficiency advocates, states, utilities, and other interested parties.
• Since Vice President Gore's National Performance Review recommendations were issued on September 7, 1993, DOE has used new approaches in carrying out its rulemaking responsibilities in the area of energy conservation standards.
• Whenever possible DOE has invited early stakeholder participation in the development of rulemaking proposals and encouraged 'interested parties" to work towards agreement-based proposals.
• In recent rulemakings the department engaged in a wide range of consensus-building mechanisms-such as technical·sessions, workshops and an agreement-based process-to supplement the traditional rulemaking proceeding.

LF47603mty0296 If 3

## DRAFT 3-4-96

Process Improvement Background Workshop 

## The first part of today's workshop presents the findings of e xtensive stakeholder consultations and solicits further input from pa rticipants. 

## • Recent rulemakings highlighted the need to address a number of complex, controversial and, important issues concerning the impact of standards on consumers and manufacturers. • As part of its efforts to make continuous improvements, DOE initiated a major process improvement effort for appliance standards rulemakings. • Interviews were held with stakeholders to gather information on various aspects of the rulemaking process and methodology. Five areas were explored: - The formal regulatory process contemplated by the laws - The weighing of benefits and burdens of standards - Technical and economic models/methodology Cooperative rulemaking - Alternatives to product standards DRAFT 3-4-96 Process Improvement Background Workshop 

## The first part oftoday's workshop presents the findings of extensive stakeholder consultations and solicits further inputfrom participants.
• Recent rulemakings highlighted the need to address a number of complex, controversial and. important issues concerning the impact of standards on consumers and manufacturers.
• As part of its efforts to make continuous improvements, DOE initiated a major process improvement effort for appliance standards rulemakings.
• Interviews were held with stakeholders to gather information on various aspects of the rulemaking process and methodology. Five areas were explored:

- The formal regulatory process contemplated by the laws

- The weighing of benefits and burdens of standards

- Technical and economic models/methodology

- Cooperative rulemaking

- Alternatives to product standards

LF47603mty0296 If 4

## DRAFT 3-4-96

Process Improvement Background Standards Impact 

## The Department of Energy is concerned about the impact of standards on stakeholder groups.

"Ciency x_ Need for national energy conservation Competitiveness and job creation for a sustainable economy 

### Energy security Emission reductions • Return on equity • Competitiveness • International trade
• Product price • Product utility 

### • Operating costs
Avoided costs Competitive impacts

LF47603mty0296 If 

## DRAFT**3~4-96** Process Improvement Background 

### Standards Impact 

## The Department of Energy is concerned about the impact of standards on stakeholder groups.

• Need for national energy conservation • Competitiveness and job creation for a sustainable economy • Energy security • Emission reductions • Return on equity • Competitiveness • International trade

• Product price • Product utility • Operating costs

• Avoided costs • Competitive impacts

LF47603mty0296 If • 5

## DRAFT 3-4-96

Process Improvement Background Methodology 

## A series of meetings was held with stakeholders who metho dically identified opportunities for improvement.

Department of Energy, Office of Energy Efficiency and Renewable Energy 

### • Policy • General Counsel • Program office 

## oces V 

## 0 *Hf

• Brookman-King • Arthur D. Little, Inc. • Issue identification • Problem definition • Root cause 

### identification • Improvement opportunities • Appliance manufacturers • Trade associations • Energy efficiency advocates • State energy conservation offices • Gas utilities • 'Electric utilities

LF47603mty0296 If 

## DRAFT 3-4-96 Process Improvement Background Methodology 

## A series of meetings was held with stakeholders who methodically identified opportunities for improvement.

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

• Policy • General Counsel • Program office • Brookman-King • Arthur D. Little, Inc. • Issue identification • Problem definition • Root cause identification • Improvement opportunities • Appliance manufacturers • Trade associations • Energy efficiency advocates • State energy conservation offices • Gas utilities • .Electric utilities

LF47603mty0296 If 6

## DRAFT 3-4-96

Process Improvement Background Approach 

## Four general improvement areas were identified and became the major themes for a series of stakeholder group meetings.

Process 

## January 3, 1996 Prioritization Study Team Work Program

• Meetings • Interviews Stakeholders 

## January 3, 1996

Decision-making • Preliminary Meeting, November 23, 1995 

## February 13, 1996

LF47603mty0296 I 7 

## DRAFT 3-4-96 Process Improvement Background Approach 

## Four general improvement areas were identified and became the majorthemes for a series of stakeholder group meetings.

• Preliminary Meeting, November 23, 1995 

### Process 

### January 3, 1996 Prioritization 

### January 3, 1996 Analysis 

### January 17,18, 

## 1996 Decision-making



### February 13, 

## 1996

LF47603mty0296 If 7

## DRAFT 3-4-96

Process Improvement Agenda


## Background 

## Process Analysis Decision Making Prioritization Potential Improvements

LF47603mty0296 If 

## DRAFT 3-4-96 Process Improvement Agenda 

# I

ilAA 

## Background

, ;. t 

# I ali %i n mpgg:;" 

## Process 

# I

4· 'v'1t¢ of**i>~~"~'** 4&4 '''i#»t@ry ,;:.w & ; 7'%»*44
..;;;;;;;;=4:=$44;;,;:;,.: 

## Analysis 

# ... .J

t £ 

# I

& 4 

## · •.. 'D$qision·.•Ma.king**s;'~** 

# ..4 i 

# priotitizatio

## n

# ·'B()t~hti~JIrl1ptovements ". .' 

# ····1 ,<.**;M~\4",·~.rl·** • ,1 '>.g' .•;i· db_gin;!;';' EN 1M

LF47603mty0296 If 8

## DRAFT 3-4-96

Process Improvement Process Stakeholder Interviews 

## A majority of stakeholders consider DOE's current rulemaki ng process as overly complex, hard to understand and impossible to influence. "When the NOPR came out no one in industry had prior knowledge of its contents, so the whole thing was a real shock." Ballast Manufacturer "The ANOPR was published and asked for costing information that industry was uncomfortable/unable/unwilling to supply-so they didn't. As a result, when the NOPR came out two years later and industry saw the data DOE used, they flipped." Trade Association "There is no process to assure industry that corrections will happen-the problem is that the communication flow is unidirectional from comments to DOE-we need an informal multidirectional process with dialogue." Energy Efficiency Advocate "`Need deadlines for DOE and a threat if DOE doesn't deliver

-this worked for the refrigerator/freezer process." Energy Efficiency Advocate

LF47603mty0296 If 

## DRAFT 3-4-96 Process Improvement Process 

### StakeholderInterviews 

## A majority of stakeholders consider DOE's current rulemaking process as overly complex, hard to understand and impossible to influence. "When the NOPR came out no one in industry had prior knowledge of its contents, so the whole thing was a real shock." Ballast Manufacturer "The ANOPR was published and asked for costing information that industry was uncomfortable/unable/unwilling to supply-so they didn't. As a result, when the NOPR came out two years later and industry saw the data DOE used, they flipped." Trade Association "There is no process to assure industry that corrections will happen-the problem is that the communication flow is unidirectional from comments to DOE-we need an informal multidirectional process with dialogue." Energy EfficiencyAdvocate '''Need deadlines for DOE and a threat if DOE doesn't deliver-this worked for the refrigerator/freezer process." Energy EfficiencyAdvocate

LF47603mty0296 If 9

## DRAFT 3-4-96

Process Improvement Process Stakeholder Interviews 

## The common element in many of the stakeholders suggestio ns for an improved process: more participation by all groups in all stages of the standards setting process. "We need a speedy consensus-based process." Lamp Manufacturer "Involve all parties throughout the process from the very beginning stages." Lamp Manufacturer 

## "If there must be standards, workshops for technical and economic analysis are the way to go." Ballast Manufacturer "If there was sharing of information sooner, then buy-in would be better." Energy Efficiency Advocate "An ideal process needs earlier inputs by key stakeholders prior to the ANOPR. There needs to be a proactive effort to involve participants before the ANOPR." Utility Interest

LF47603mty0296If 10 

## DRAFT 3-4-96 Process Improvement Process StakeholderInterviews 

## The common element in many of the stakeholders suggestions for an improved process: more participation by all groups in all stages of the standards setting process. "We need a speedy consensus-based process." Lamp Manufacturer
"Involve all parties throughout the process from the very beginning stages." Lamp Manufacturer "If there must be standards, workshops for technical and economic analysis are the way to go." Ballast Manufacturer "If there was sharing of information sooner, then buy-in would be better." Energy EfficiencyAdvocate "An ideal process needs earlier inputs by key stakeholders prior to the ANOPR. There needs to be a proactive effort to involve participants before the ANOPR." UtilityInterest

LF47603mty0296 If 1 0

## DRAFT 3-4-96

Process Improvement Process Current Process 

## The current rulemaking process results in insufficient stake holder involvement and does not provide opportunity for dialog.

Intra-Agency Coordination

• Identify problem • Substantiate problem • Determine solution Advance Notice of Proposed Rulemaking Comment

I ntra-Agency Coordination Proposed

Rulemaking Final Rule Petition for

Reconsideration

Effective

Date

LF47603mty0296 If 11 

## DRAFT 3-4-96 Process Improvement Process Current Process 

## The current rulemaking process results in insufficient stakeholder involvement and does not provide opportunity for dialog.

Triggering Event

• Identify problem • Substantiate problem • Determine solution Advance Notice of Proposed Rulemaking Intra-Agency Proposed Intra-Agency Coordination Coe:,rdiriation Rulemaking**~==~** Final Rule Effective Date

LF47603mty0296 If 11

## DRAFT 3-4-96

Process Improvement Process Suggested Process 

## Stakeholders suggested an open process with more opportunity for stakeholder dialog.

Triggering Event Intra-Agency

Coordination Advance

Notice of Proposed Rulemaking Intra-Agency

Coordination Proposed

Rulemaking Intra-Agency

Coordination Final

Rule Effective Date 

## DRAFT 3-4-96 Process Improvement Process SuggestedProcess 

## Stakeholders suggested an open process with more opportunity for stakeholder dialog.

Triggering Event Advance**Jntra~Agency** Notice of Coordination Proposed Rulemaking Intra-Agency Proposed Coordination Rulemaking Intra-Agency

.Coordination**1-::m:m:!I~~** Final Rule Effective Date

LF47603mty0296 If 12

## DRAFT 3-4-96

Process Improvement Agenda


## Background

Analysis

Prioritization 

## Potential Improvements

LF47603mty0296 If 13 

## DRAFT 3-4-96 Process Improvement Agenda



## .····Background
kg Qg;;;; 'l:%&i14A EW ill? ttu,; Cpb& +&; . 

# t
..· .. , 

# I i UladaG;! um 

## Analysis**iD~Cisi9rl** 

## Making**'.;>:':~{:~;<~>;:,:** :;.:,' ,';>: : ,', ; :;:," :: ; < :, ,./l'


## potential Improvements**./'~,),:;;!:);:<~,~:",:.:' >,~,~"<.,;:,:.,.:,,;,,»,,,**  '. ,',

LF47603mty0296 If 13

## DRAFT 3-4-96

Process Improvement Analysis Agenda

LF47603mty0296 II 14 

## DRAFT 3-4-96 Process Improvement Analysis Agenda



## Products 

# "
..,J I

, NAP' dg'4 r 

## Consumers Manufacturers 

# J National 

# .J

LF47603mty0296 II 14

## DRAFT 3-4-96

Process Improvement Analysis 

## The following analysis issues were considered for products, consumers, manufacturers, and the nation.

Statutory/Policy Issues Data Issues Contractor Issues Model/Methods 

### consume Statutory/Policy Issues 

### Consumer Choice Issues Financial Model Issues 

### Equity Methods 1, 

### Statutory/Policy Issues Data Issues Financial Model Issues Economic Model Issues 

### 1-114911- Overview

Statutory/Policy Issues Model Issues Market Solutions Utility Emissions

LF47603mty0296 If 15 

## DRAFT 3-4-96 Process Improvement Analysis 

### Overview 

## The following analysis issues were considered for products, consumers, manufacturers, and the nation.

'\, ,**~** \"**~":;;i** 

### " . 'F?roduc'ts ,"**~ ~**  \' :1!4 "'I**~ 0'~t**  "::**'(~** \q;; t): '>**~ '0-1':~~\;** **~y** J""**'\~~;y ~J**  .:x**~","i.",**... >;1 I'::.**~h(' '~~**  .... '"**~} ';;'~**  !'i<% A:Z,""**4R'h1t~;rk$$~+~~l** 

### .; ,**Consumers:~ t~L** 

### i

:, "**~** p'**~;:** i\0t'**~': ~~'15** **:~~;.~ 1:f~~:** **:::~~~~~~~** Statutory/Policy Statutory/Policy Statutory/Policy Statutory/Policy Issues Issues Issues Issues Data Issues Consumer Choice Data Issues Model Issues Issues Contractor Issues Financial Model Market Solutions Financial Model Issues Model/Methods Issues Utility Emissions Economic Model Equity Methods Issues**",~**.....**.,..~ "'""",,",,&~~**  __**~~'>M ~;..,**  

# -
.....**~**

....,,,-**"'''''~~,** •**Mo.~.~_~**....,

LF47603mty0296 If 15

### Process Improvement Analysis



## The following product issues were identified.

• Should `Technologically Feasible" include manufacturing practicality? • Is the existence of a support infrastructure a relevant criteria? - Suppliers, buyers, distributors, service • Have concerns of product utility, reliability and safety been adequately considered? • How can "economically justified" and speculative forecasts be reconciled? • Should "MAX Tech" be pursued? • How can confidential manufacturing cost data be obtained? • How should data spread be treated? • How should uncertainty be portrayed? • How can the data obtained be validated? • What can be done when no data is available? • How do anti-competitive laws restrict data availability? Contractor Issues How should support contractors be selected? • What level of review is appropriate? • What should be the nature of the support contract? L 

## DRAFT 3-4-96 Product Issues

Models/Methods • Does the analysis reflect that the impact of design options is different for different firms? • How should the product classes be selected?

LF47603mty0296 If 16 Process Improvement 

### Analysis 

## The following product issues were identified.

.•••.·...:·§tatutorylssues



### .......... ...... . ....... • Should "Technologically Feasible" include manufacturing practicality? • Is the existence of a support infrastructure a relevant criteria?

- Suppliers, buyers, distributors, service • Have concerns of product utility, reliability and safety been adequately considered? • How can "economically justified" and speculative forecasts be reconciled? • Should "MAX Tech" be pursued? Data Issues

. :

# ... • How can confidential manufacturing cost data be obtained? • How should data spread be treated? • How should uncertainty be portrayed? • How can the data obtained be validated? • What can be done when no data is available? • How do anti-competitive laws restrict data availability? Contractor Issues
• How should support contractors be selected? • What level of review is appropriate? • What should be the nature of the support contract? 

## DRAFT 3-4-96 Product Issues

Models/Methods
• Does the analysis reflect that the impact of design options is different for different firms? • How should the product classes be selected?

LF47603mty0296 If 16

## DRAFT 3-4-96

Process Improvement Analysis Product Issues-Engineering Analysis 

## Stakeholders support the concept of employing technical experts and providing extensive peer review
. Also... "DOE should hire industry people. Maybe even hire more people than they have now and be less reliant on a contractor." Trade Association 

## "We need competent consultants with industry experience to perform the engineering analysis." Lamp Manufacturer "(Engineering) analysis should be done by experienced, impartial technical people." Water Heater Manufacturer 

## "The contractor is doing its best, but they need peer review." Electric Utility Interest 

## "Paralysis by analysis is a concern." Energy Efficiency Advocate 

## ...interim analyses results should be publicized to allow for early comment. LF47603mry0296 It 17 

## DRAFT 3-4-96 Process Improvement Analysis 

### Product Issues-EngineeringAnalysis 

## Stakeholders support the concept of employing technical experts and providing extensive peer review. Also... "DOE should hire industry people. Maybe even hire more people than they have now and be less reliant on a contractor." Trade Association 

### "We need competent consultants with industry experience to perform the engineering analysis." Lamp Manufacturer 

### "(Engineering) analysis should be done by experienced, impartial technical people." Water HeaterManufacturer 

### "The contractor is doing its best, but they need peer review." Electric Utility Interest 

### "Paralysis by analysis is a concern." Energy EfficiencyAdvocate



## ...interim analyses results should be publicized to allow for 

## early comment. LF47603mty0296 If 17

## DRAFT 3-4-96

Process Improvement Analysis Product Issues-MAX Tech 

## The law requires that standards promote the achievement of the maximum efficiency potential-"technologically feasible" an d "economically justified." "At the levels originally set in NAECA and EPAct, the standards were not `pushing' technology. As standards are revised, this is an entirely different ball game. If standards are too high, they could drive out of business the smaller manufacturers as capital needs and proprietary designs become dominant issues." Trade Association "Standards should not drive technology to its limits, but rather remove low-end products from the market." Trade Association "The statute is biased toward conservation. Setting a high level first and then lowering it in response to well-documented comments is a safe approach for DOE to use given the statute and possible legal challenges." Trade Association 

## This approach is an example of "technology driven standar ds," or "technology forcing" and is the source of much debate.

LF47603mty0296 If 18 

## DRAFT 3-4-96 Process Improvement Analysis 

### Product Issues-MAX Tech 

## The law requires that standards promote the achievement ofthe maximum efficiencypotential-"technologically

## feasible" and "economicallyjustified." "At the levels originally set in NAECA and EPAct, the standards were not 'pushing'technology. As standards are revised, this is an entirely different ball game. If standards are too high, they could drive out of business the smaller manufacturers as capital needs and proprietary designs become dominant issues." Trade Association 

### "Standards should not drivetechnology to its limits, but rather remove low-end products from the market." Trade Association 

### "The statute is biased toward conservation. Setting a high level first and then lowering it in response to well-documented comments is a safe approach for DOE to use given the statute and possible legal challenges." Trade Association 

## This approach is an example of "technology driven standards," or "technology forcing" and isthe source of much debate.

LF47603mty0296 If 18

### Process Improvement Analysis



## The following consumer issues were identified.
Consumer. ssues`

Sam Statutory /Policy • Are product features preserved? Consumer Choice Has consumer choice been limited? Enhanced? Are increased first-costs preventing some consumer classes from purchasing the product? Financial Model What is the appropriate discount rate for life-cycle cost calculations? • Should average energy costs be be used? • Should average consumer usage patterns be considered? 

## DRAFT 3-4-96 Consumer Issues

Equity • What are the distributive impacts of standards? - on different regions (varying weather and utility rates) - on consumer rate classes income level home size age - on end-use patterns

LF47603mty0296 It 19 

### Process Improvement f\nalysis 

## The following consumer issues were identified.

• Are product features preserved? ConsumerChoice



### . ": 

## ..:.-,; .':.:.:. • Has consumer choice been limited? Enhanced? • Are increased first-costs preventing some consumer classes from purchasing the product? Financial Model
• What is the appropriate discount rate for life-cycle cost calculations? • Should average energy costs be be used? • Should average consumer usage patterns be considered? 

## DRAFT 3-4-96 ConsumerIssues

Equity
• What are the distributive impacts of standards?

- on different regions (varying weather and utility rates)

- on consumer rate classes

- income level

- home size

- age

- on end-use patterns

LF47603mty0296 If 19

## DRAFT 3-4-96

Process Improvement Analysis Consumer Issues 

## Regional energy costs, climate conditions , and appliance usage patterns have varying impacts on consumers.

"We need to look at average consumers" Energy Efficiency Advocate "This is not a big problem and should have a low priority." Energy Efficiency Advocate "Standards impact differently in different geographic regions of the U.S. This issue is worthy of discussion." 

## Utility Interest



## This issue is weighed differently by different stakeholder groups.

LF47603mty0296 If 20 

## DRAFT 3-4-96 Process Improvement Analysis ConsumerIssues 

## Regional energy costs, climate conditions, and appliance usage patterns have varying impacts on consumers.

"We need to look at average consumers" Energy EfficiencyAdvocate "This is not a big problem and should have a low priority." Energy EfficiencyAdvocate "Standards impact differently in different geographic regions of the U.S. This issue is worthy of discussion." , Utility Interest



## This issue is weighed differently by different stakeholder groups.

LF47603mty0296 If 20

### Process Improvement Analysis



## The following manufacturer issues were identified. ani factures Issue, Statutory Issues Have standards resulted in a lessening of competition? Should the "Jobs Impact" of proposed standards be considered? - Total jobs? - Jobs displaced? Should standard levels that change industry structure be mandated? - Number of competitors - Competitors' market share - Dominant technology Data Issues • How can confidential manufacturer data be obtained? • What are appropriate sources of public data? Analysis/Models Methods How will the price increase affect demand for the product? How much of the costincrease will be passedthrough to the consumer? What qualitative methodologies would improve manufacturer impact analysis? - Interviews? - Site visits? 

## DRAFT 3-4-96 Manufacturer Issues

Consultation Issues How can foregone investments be valued? • How can stranded assets be valued? • How can the cumulative burden of multiple standards be considered? • How can the analysis characterize different manufacturers?

t.F47603mty0296 If 21 

### Process Improvement Analysis

### T~e 

## following manufacturer issues were identified.

• Have standards resulted in a lessening of competition? • Should the "Jobs Impact" of proposed standards be considered?

- Total jobs?

- Jobs displaced? • Should standard levels that change industry structure be mandated?

- Number of competitors

- Competitors' market share

- Dominant technology • How can confidential manufacturer data be obtained? • What are appropriate sources of public data? Analysis/Models Methods·
• How will the price increase affect demand for the product? • How much of the cost increase will be passedthrough to the consumer? • What qualitative methodologies would improve manufacturer impact analysis?

- Interviews?

- Site visits? 

## DRAFT 3-4-96 ManufacturerIssues

Consultation Issues

• How can foregone investments be valued? • How can stranded assets be valued? • How can the cumulative burden of multiple standards be considered? • How can the analysis characterize different manufacturers?

LF47603mty0296 If 21

## DRAFT 3-4-96

Process Improvement Analysis Manufacturer Issues 

## Accurately evaluating the impact of standards on manufacturers may require substantial revisions to the current analysis method ologies. "Manufacturer impact analysis is a key issue. The key factors are the impact of price on consumer demand and manufacturer mark-up

. We need better data to define these parameters." Energy Efficiency Advocate "DOE uses models that industry does not relate to. Key models are overly complex and not sufficiently validated." Trade Association "The detailed theoretical academic models used have virtually no connection to the realities of a competitive free marketplace. We question whether or not such studies have any practical value." Ballast Manufacturer "In the Federal program, determining the economic impact on manufacturers is the controlling issue." State Energy Office 

## More "qualitative" measures should be added to enhance the analysis.

LF47603mry0296 If 22 

## DRAFT 3-4-96 Process Improvement Analysis 

### ManufacturerIssues 

## Accurately evaluating the impact of standards on manufacturers may require substantial revisions to the current analysis methodologies. "Manufacturer impact analysis is a key issue. The key factors are the impact of price on consumer demand and manufacturer mark-up. We need better data
. to define these parameters." 

### Energy EfficiencyAdvocate "DOE uses models that industry does not relate to. Key models are overly complex and not sufficiently validated." 

### Trade Association "The detailed theoretical academic models used have virtually no connection to the realities of a competitive free marketplace. We question whether or not such studies have any practical value." 

### Ballast Manufacturer "In the Federal program, determining the economic impact on manufacturers is the controlling issue." 

### State Energy Office 

## More "qualitative" measures should be added to enhance the analysis.

LF47603mty0296 If 22

### Process Improvement Analysis



## The following national issues were identified. atic h I IsS

### UE Statutory/Policy What forces drive the nation's needs for energy conservation? Security Environmental quality Economic benefits from energy savings What is a "significant" levelof savings for the mid1990's and beyond? Models How should the baseline energy consumption be calculated? How will energy price forecasts change the program's benefits? Market Solutions Are market forces accurately represented in the baseline energy consumption forecast? Could other regulatory-non-regulatory methods achieve similar results? 

## DRAFT 3-4-96 National Issues

Utility Emissions . Should environmental costs/benefits be monetized?

LF47603mmyO296 If 23 Process Improvement 

### Analysis 

## The following national issues were identified.

• What forces drive the nation's needs for energy conservation? • Security • Environmental quality • Economic benefits from energy savings • What is a "significant" level of savings for the mid1990's and beyond? • How should the baseline energy consumption be calculated? • How will energy price forecasts change the program's benefits? Market Solutions·

• Are market forces accurately represented in the baseline energy consumption forecast? • Could other regulatory-non-regulatory methods achieve similar results? 

## DRAFT 3-4-96 National Issues

Utility Emissions



### . • Should environmental costs/benefits be monetized?

LF47603mly0296 If 23

## DRAFT 3-4-96

Process Improvement Analysis National Issues 

## A clearer definition of what constitutes a "significant" level of energy savings is required.

"The law of diminishing returns is catching up with us. Why regulate an appliance that consumes $14 of energy per year?"Appliance Manufacturer "We are getting closer to Carnot efficiency
. The gains in efficiency are obtained at a higher cost." Utility Interest "Efficiency changes can be evolutionary or revolutionary . Evolutionary changes cost increasingly more to implement." . Appliance Manufacturer " In the absence of major leaps in technology, products should.be "graduated" from the standards program." Appliance Manufacturer

LF47603mty0296 If 24 

## DRAFT 3-4-96 Process Improvement Analysis 

### National Issues 

## A clearer definition ofwhat constitutes a "significant" level of energy savings is required.

"The law of diminishing returns is catching up with us. Why regulate an appliance that consumes $14of energy per year?"
. Appliance Manufacturer "We are getting closer to Carnot efficiency. The gains in efficiency are obtained at a higher cost."
. UtilityInterest "Efficiency changes can be evolutionary or revolutionary. Evolutionary changes cost increasingly more to implement."
. Appliance Manufacturer " In the absence of major leaps in technology, products shouldbe "graduated" from the standards program." Appliance Manufacturer

LF47603mty0296 If 24

## DRAFT 3-4-96

Process Improvement Agenda 

## Background
Process Analysis

Prioritization 

## Potential Improvements

LF47603mty0296 if 25 

### Process Improvement Agenda 

# l ,pi ".,.
. ..

# ··'C;/3a"CkgfOt.Jr'ld

·····;··'2';', r % b soc'; kAWP; £1 4b% d lnW,¥&:t?4;'

1. ', •.(.·.•.

',;;.•••··•·•.••.. >, ..,',;,v •.

'.,'••

## ,'i(Rrocess

• ,.'
. '._,,"_
_ _ :d<:;:,»>, "-.':**~:,:_.;<::>** i us u;; hy;;;$",' ; hgM au



## Decision Making 

## Prioritization 1
'•.....•.' ....,

### ..•..",.".,'

...... ¥ B& - :/,-,:,:>','- ':;-'.::':::<:::: :<,,:,:::,::.,:",' , -:,-,::,:::,\ .',:::**':<:>:;:~::::,,:)<:-::-):**-:;-,' :' -',' -,' -",-',' ,::- :<:. :--

### :',« :: 9 %&£;.;;.1 1 ggbsN44**a~l.,;;;g44kk-?** PM J¥",$¥4;Z;P;;W;md· @d'1£%M4tk A 

## F'otentiallmprovements

/', '., .,,,,'i',' • 

## DRAFT 3-4-96


# .,,,,,,..1 

# "".I

....1

LF47603mty0296 If 25

## DRAFT 3-4-96

Process Improvement Decision Making 

## The uncertainty of any quantitative analysis must be conveyed to DOE decision makers.

• Projected energy savings for each standard level 

## • Impact on consumers ( product energy use, costs, and paybacks) • Impact on manufacturers ( return-on-equity and projected product shipments) • Other relevant factors ( net present value, environmental impacts, and benefit/cost ratios)



## Reviewing the briefing materials would provide an additional opportunity for stakeholder participation.

LF47603mty0296If 26 

## DRAFT 3-4-96 Process Improvement Decision Making 

## The uncertainty of any quantitative analysis must be conveyed to DOE decision makers.

• Projected energy savings for each standard level
• Impact on consumers ( product energy use, costs, and paybacks)
• Impact on manufacturers ( return-on-equity and projected product shipments)
• Other relevant factors ( net present value, environmental impacts, and benefit/cost ratios)



## Reviewing the briefing materials would provide an additional opportunityfor stakeholder participation.

LF47S03mly029S If 26

## DRAFT 3-4-96

Process Improvement Agenda



## Analysis 

## Decision Making Prioritization Potential Improvements

LF47603mty0296 If 27 

## DRAFT 3-4-96 Process Improvement 

### Agenda 

# r... aM 

# I
I , ,.;wl, " ; »**~** b g '\**I~,,,,.M** s· 441: h ,## 4; 

# J

; 9&4.**~=m** 1ZSJ t%§; ; I, 2 444 g!
. 

# ,,,I <Analysis**D~cision** 

## Making Prioritization



## ..**·····E()t~ntial'mpr()vements ~;':·:~>;:t>:;·:»:**  ,}' "**~'<;<:''J:'>:''''<** ::,->;:,

LF47S03mty029S If 27

## DRAFT 3-4-96

Process Improvement Prioritization Stakeholder Consultations 

## Prioritization of rulemakings was emphasized as a fundamental means of improving the efficacy of the appliance program. • Most believed that the department could not realistically achieve the original rulemaking timetable-set by legislation.



## • DOE should be given more flexibility in priority setting. Stakeholders noted that the department's regulatory agenda, as currently conducted and published in the Federal Register, has limited value. • Whatever prioritization plan DOE does adopt, stakeholders should be consulted. • Many participants stated the need for a more dynamic strategic plan for the appliance program-one that considers a larger government-wide view and inter-agency involvement.

Lt 47603mty0296 If 28 

## DRAFT 3-4-96 Process Improvement Prioritization Stakeholder Consultations
. 

## Prioritization of rulemakings was emphasized as a fundamental means of improving the efficacy ofthe appliance program.

• Most believed that the department could not realistically achieve the original rulemaking timetable'set by legislation.
• DOE should be given more flexibility in priority setting.
• Stakeholders noted that the department's regulatory agenda, as currently conducted and published in the Federal Register, has limited value.
• Whatever prioritization plan DOE does adopt, stakeholders should be consulted.

. . 

## • Many participants stated the need for a more dynamic strategic plan for the appliance program-one that considers a larger government-wide view and inter-agency involvement.

. LF47603mty0296 If 28

### DRAFT 3-4-96

Process Improvement Prioritization Stakeholder Consultations 

## The department received suggestions of possible criteria it should use in planning and prioritizing future rules. • The legislated schedule • The potential for energy savings • An evaluation of market direction • The status of test procedure revisions, if required • The current status of regulation development (amount of analysis and other work completed) • The presence of unresolved issues 

## • The status of other DOE or other agency regulations • The cumulative burden on multi-product manufacturers • Other factors found relevant

LF47603mty0296 If 29 

## DRAFT 3-4-96 Process Improvement Prioritization Stakeholder Consultations 

## The department**rec~ived** 

## suggestions of possible criteria it should use in planning and prioritizing future rules.

• The legislated schedule
• The potential for energy savings
• An evaluation of market direction
• The status of test procedure revisions, if required
• The current status of regulation development (amount of analysis and other work completed)
• The presence of unresolved issues
• The status of other DOE or other agency regulations
• The cumulative burden on multi-product manufacturers
• Other factors found relevant

LF47603mty0296 If 29

## DRAFT 3-4-96

Process Improvement Agenda 

## Background
Process

Prioritization Potential Improvements

LF47603mty0296 It 30 

## DRAFT 3-4-96 Process Improvement Agenda 

# Ii

'5;; 

# ."","," "''"" .,1 

# I 'm."
.. '"
.." "

# ,I 

# I =&4;\t 

## Analysis 

# , ........"
..,J

a Sg B¥w !gp'mAc; W2 : :)2=.-0 4 Ii @4 

# I
""'{ %fA $2; 

### ==$ 4wS; %&rU**<'~<[)ecisiorr**

## Making

.Prioritization 4,
_ "" ••

# ,.""~,,J Potential Improvements

lF47603mty0296 If 30

## DRAFT 3-4-96

Process Improvement Potential Improvements Process 

## Incorporating stakeholder views, a list of potential improvements to the current rulemaking process was developed.

Initiate stakeholder consultations before the ANOPR and before the NOPR is published Consider the concept of informal consensus standards if stakeholders perceive that the benefits justify the effort

LF47603mty0296 If 31 

## DRAFT 3-4-96 Process Improvement Potential Improvements Process 

## Incorporating stakeholderviews, a list of potential improvements to the current rulemaking process was developed.

Initiate stakeholder consultations before the ANOPR and before the NOPR is published**l=iI>:#I4A~""",~~'~** 

## Consider the concept of informal consensus standards if stakeholders perceive that the bene'fits justify the effort
.



# -**~.rK>;J:.~~~~~ '~~~** 

LF47603mty0296 If 31

## DRAFT 3-4-96

Process Improvement Potential Improvements Analysis 

## Possible solutions to product issues were suggested.

Ensure that contractors performing the engineering analysis possess the appropriate design and manufacturing expertise Peer review contractor work Consult stakeholders early and often to address engineering and data issues. 

## I

LF47603mtyO296 If 32 

### Process Improvement Potential Improvements 

## Possible solutions to product issues were suggested.

Ensure that contractors performing the engineering analysis possess the appropriate design and manufacturing 

## expertise Peer review contractor work Consult stakeholders early and often to address engineering and data issues. DRAFT 3-4-96 Analysis

LF47603mty0296 If 32

## DRAFT 3-4-96

Process Improvement Potential Improvements Analysis 

## Despite the shortcomings of models, stakeholders generally recognize their usefulness.

Data 9j



## • Since, both the models and the data driving them are uncertain, the modeling process should make explicit this consideration. Review • Over reliance on assumptions and models can produce

inaccurate results, expert judgment and qualitative analysis is needed to provide a "reality check." Participation • Increased stakeholder participation in the development

of models and in the analyses is required to ensure accuracy, transparency and valid results. Assumptions 

## • The key assumptions must be understood and

accepted for the output to be trusted.
I

LF47603mty0296 If 33 

## DRAFT 3-4-96 Process Improvement Potential Improvements Analysis 

## Despite the shortcomings of models, stakeholders generally recognize their usefulness.

Data

Review 

## • Since both the models and the data driving them are uncertain, the modeling process should make explicit this consideration.
• Over reliance on assumptions and models can produce inaccurate results, expert judgment and qualitative analysis is needed to provide a "reality check." Participation • 

## Increased stakeholder participation in the development of models and in the analyses is required to ensure accuracy, transparency and valid results. Assumptions • 

## The key assumptions must be understood and accepted for the output to be trusted.

LF47603mty0296 If 33

## DRAFT 3-4-96

Process Improvement Potential Improvements Prioritization 

## To enhance planning and coordination with respect to both new and existing regulation, stakeholders suggested a number of possible department actions.

Make regulatory agenda preparation an opportunity for stakeholder input Receive public input on the estimate of energy savings Improve test procedure linkage to new standards

LF47603mty0296 If 34 

## DRAFT 3-4-96 Process Improvement Potential Improvements Prioritization 

## To enhance planning and**coordin~ation** 

## with respect to both new and existing regulation, stakeholders suggested a number of possible department actions.

Make regulatory agenda preparation an opportunity for stakeholder input Receive public input on the estimate of energy savings Improve test procedure linkage to new standards

LF47603mty0296 If 34