[Federal Register Volume 76, Number 77 (Thursday, April 21, 2011)]
[Rules and Regulations]
[Pages 22454-22564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9040]



[[Page 22453]]

Vol. 76

Thursday,

No. 77

April 21, 2011

Part II





Department of Energy





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10 CFR Part 430



Energy Conservation Program: Energy Conservation Standards for 
Residential Clothes Dryers and Room Air Conditioners; Final Rule

Federal Register / Vol. 76 , No. 77 / Thursday, April 21, 2011 / 
Rules and Regulations

[[Page 22454]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2007-BT-STD-0010]
RIN 1904-AA89


Energy Conservation Program: Energy Conservation Standards for 
Residential Clothes Dryers and Room Air Conditioners

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

ACTION: Direct final rule.

-----------------------------------------------------------------------

SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes 
energy conservation standards for various consumer products and 
commercial and industrial equipment, including residential clothes 
dryers and room air conditioners. EPCA also requires the U.S. 
Department of Energy (DOE) to determine if amended standards for these 
products are technologically feasible and economically justified, and 
would save a significant amount of energy. In this direct final rule, 
DOE adopts amended energy conservation standards for residential 
clothes dryers and room air conditioners. A notice of proposed 
rulemaking that proposes identical energy efficiency standards is 
published elsewhere in today's Federal Register. If DOE receives 
adverse comment and determines that such comment may provide a 
reasonable basis for withdrawing the direct final rule, this final rule 
will be withdrawn and DOE will proceed with the proposed rule.

DATES: The final rule is effective on August 19, 2011 unless adverse 
comment is received by August 9, 2011. If adverse comments are received 
that DOE determines may provide a reasonable basis for withdrawal of 
the final rule, a timely withdrawal of this rule will be published in 
the Federal Register. If no such adverse comments are received, 
compliance with the standards in this final rule will be required on 
April 21, 2014.

ADDRESSES: Any comments submitted must identify the direct final rule 
for Energy Conservation Standards for Residential Clothes Dryers and 
Room Air Conditioners, and provide docket number EERE-2007-BT-STD-0010 
and/or regulatory information number (RIN) number 1904-AA89. Comments 
may be submitted using any of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. E-mail: <a href="/cdn-cgi/l/email-protection#31595e5c546e5041415d58505f5254031f43445d545c505a585f567154541f555e541f565e47"><span class="__cf_email__" data-cfemail="7a1215171f251b0a0a16131b14191f4854080f161f171b1113141d3a1f1f541e151f541d150c">[email protected]</span></a>. 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-2J, 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. It is not necessary to include printed 
copies.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VII of this document 
(Public Participation).
    Docket: The docket is available for review at regulations.gov, 
including Federal Register notices, framework documents, public meeting 
attendee lists and transcripts, comments, and other supporting 
documents/materials. All documents in the docket are listed in the 
regulations.gov index. Not all documents listed in the index may be 
publicly available, such as information that is exempt from public 
disclosure. A link to the docket web page can be found at http://www.regulations.gov.
    For further information on how to submit or review public comments 
or view hard copies of the docket in the Resource Room, contact Ms. 
Brenda Edwards at (202) 586-2945 or e-mail: <a href="/cdn-cgi/l/email-protection#f7b58592999396d9b2938096859384b79292d9939892d9909881"><span class="__cf_email__" data-cfemail="0c4e7e6962686d2249687b6d7e687f4c696922686369226b637a">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT:

Stephen L. Witkowski, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 
1000 Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-
7463, e-mail: <a href="/cdn-cgi/l/email-protection#95e6e1f0e5fdf0fbbbe2fce1fefae2e6fefcd5f0f0bbf1faf0bbf2fae3"><span class="__cf_email__" data-cfemail="d2a1a6b7a2bab7bcfca5bba6b9bda5a1b9bb92b7b7fcb6bdb7fcb5bda4">[email protected]</span></a>.
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of General 
Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-
0121, (202) 586-7796, e-mail: <a href="/cdn-cgi/l/email-protection#1b5e7772617a797e6f7335507473775b736a357f747e357c746d"><span class="__cf_email__" data-cfemail="8ecbe2e7f4efecebfae6a0c5e1e6e2cee6ffa0eae1eba0e9e1f8">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Summary of the Direct Final Rule
    A. The Energy Conservation Standard Levels
    B. Benefits and Costs to Consumerss
    C. Impact on Manufacturers
    D. National Benefits
    E. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Residential Clothes 
Dryers and Room Air Conditioners
    3. Consensus Agreement for Residential Clothes Dryers and Room 
Air Conditioners
III. General Discussion
    A. Test Procedures
    1. Clothes Dryer Test Procedure
    a. Standby Mode and Off Mode
    b. Automatic Cycle Termination
    c. Ventless Clothes Dryers
    d. Consumer Usage Habits
    e. Drum Capacity Measurement
    f. HVAC Effects
    g. Efficiency Metric
    2. Room Air Conditioner Test Procedure
    a. Standby Mode and Off Mode
    b. Active Mode Referenced Standards
    c. Annual Active Mode Hours
    d. Part-Load Operation
    e. Distribution of Air
    3. Effects of Test Procedure Revisions on the Measured 
Efficiency
    a. Clothes Dryers
    b. Room Air Conditioners
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    a. Clothes Dryers
    b. Room Air Conditioners
    c. Available Max-Tech Products With Higher EER Ratings
    d. Consideration of Conversion to R-410A Refrigerant in Max-Tech 
Selections
    C. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    D. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion
    A. Market and Technology Assessment
    1. General
    2. Products Included in This Rulemaking
    a. Clothes Dryers
    b. Room Air Conditioners
    3. Product Classes
    a. Clothes Dryers
    b. Room Air Conditioners
    4. Non-Regulatory Programs
    5. Technology Options
    a. Clothes Dryers
    b. Room Air Conditioners
    B. Screening Analysis
    1. Clothes Dryers
    2. Room Air Conditioners
    C. Engineering Analysis
    1. Technologies Not Analyzed
    a. Clothes Dryers
    b. Room Air Conditioners
    2. Efficiency Levels and Cost-Efficiency Results

[[Page 22455]]

    a. Clothes Dryers
    b. Room Air Conditioners
    D. Markups Analysis
    E. Energy Use Analysis
    1. Clothes Dryers
    2. Room Air Conditioners
    F. Life-Cycle Cost and Payback Period Analyses
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Energy Price Projections
    6. Maintenance and Repair Costs
    7. Product Lifetime
    8. Discount Rates
    a. Residential Discount Rates
    b. Commercial Discount Rates
    9. Compliance Date of Amended Standards
    10. Base Case Efficiency Distribution
    11. Inputs to Payback Period Analysis
    12. Rebuttable-Presumption Payback Period
    G. National Impact Analysis--National Energy Savings and Net 
Present Value Analysis
    1. Shipments
    2. Forecasted Efficiency in the Base Case and Standards Cases
    3. National Energy Savings
    4. Net Present Value of Consumer Benefit
    5. Benefits From Effects of Standards on Energy Prices
    H. Consumer Subgroup Analysis
    I. 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 Analysis
    a. GRIM Key Inputs
    b. GRIM Scenarios
    3. Discussion of Comments
    a. Small Businesses
    b. Cumulative Regulatory Burden
    c. Employment Impacts
    4. Manufacturer Interviews
    a. Clothes Dryer Key Issues
    b. Room Air Conditioner Key Issues
    J. Employment Impact Analysis
    K. Utility Impact Analysis
    L. Environmental Assessment
    M. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
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 Sub-Group 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. Other Factors
    C. Proposed Standards
    1. Benefits and Burdens of TSLs Considered for Clothes Dryers
    2. Benefits and Burdens of TSLs Considered for Room Air 
Conditioners
    3. 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
    1. Residential Clothes Dryer Industry
    2. Room Air Conditioner Industry
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act
    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
    M. Congressional Notification
VII. Public Participation
    A. Submission of Comments
VIII. Approval of the Office of the Secretary

I. Summary of the Direct Final Rule

A. The Energy Conservation Standard Levels

    The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.; 
EPCA or the Act), as amended, provides that any amended energy 
conservation standard DOE prescribes for covered products, such as 
residential clothes dryers (clothes dryers) and room air conditioners, 
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 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 adopts amended energy conservation standards for clothes 
dryers and room air conditioners as shown in Table I-1. The standards 
apply to all products listed in Table I-1 and manufactured in, or 
imported into, the United States on or after April 21, 2014.

Table I-1--Amended Energy Conservation Standards for Residential Clothes
                    Dryers and Room Air Conditioners
------------------------------------------------------------------------
                                                           Minimum  CEF
                      Product class                        levels*  lb/
                                                                kWh
------------------------------------------------------------------------
                       Residential Clothes Dryers
------------------------------------------------------------------------
1. Vented Electric, Standard (4.4 ft\3\ or greater                  3.73
 capacity)..............................................
2. Vented Electric, Compact (120 V) (less than 4.4 ft\3\            3.61
 capacity)..............................................
3. Vented Electric, Compact (240 V) (less than 4.4 ft\3\            3.27
 capacity)..............................................
4. Vented Gas...........................................            3.30
5. Ventless Electric, Compact (240 V) (less than 4.4                2.55
 ft\3\ capacity)........................................
6. Ventless Electric Combination Washer/Dryer...........            2.08
------------------------------------------------------------------------


 
                                                           Minimum  CEER
                      Product class                        levels** Btu/
                                                                Wh
------------------------------------------------------------------------
                          Room Air Conditioners
------------------------------------------------------------------------
1. Without reverse cycle, with louvered sides, and less             11.0
 than 6,000 Btu/h.......................................

[[Page 22456]]

 
2. Without reverse cycle, with louvered sides, and 6,000            11.0
 to 7,999 Btu/h.........................................
3. Without reverse cycle, with louvered sides, and 8,000            10.9
 to 13,999 Btu/h........................................
4. Without reverse cycle, with louvered sides, and                  10.7
 14,000 to 19,999 Btu/h.................................
5a. Without reverse cycle, with louvered sides, and                  9.4
 20,000 to 24,999 Btu/h.................................
5b. Without reverse cycle, with louvered sides, and                  9.0
 25,000 Btu/h or more...................................
6. Without reverse cycle, without louvered sides, and               10.0
 less than 6,000 Btu/h..................................
7. Without reverse cycle, without louvered sides, and               10.0
 6,000 to 7,999 Btu/h...................................
8a. Without reverse cycle, without louvered sides, and               9.6
 8,000 to 10,999 Btu/h..................................
8b. Without reverse cycle, without louvered sides, and               9.5
 11,000 to 13,999 Btu/h.................................
9. Without reverse cycle, without louvered sides, and                9.3
 14,000 to 19,999 Btu/h.................................
10. Without reverse cycle, without louvered sides, and               9.4
 20,000 Btu/h or more...................................
11. With reverse cycle, with louvered sides, and less                9.8
 than 20,000 Btu/h......................................
12. With reverse cycle, without louvered sides, and less             9.3
 than 14,000 Btu/h......................................
13. With reverse cycle, with louvered sides, and 20,000              9.3
 Btu/h or more..........................................
14. With reverse cycle, without louvered sides, and                  8.7
 14,000 Btu/h or more...................................
15. Casement-only.......................................             9.5
16. Casement-slider.....................................            10.4
------------------------------------------------------------------------
* CEF (Combined Energy Factor) is calculated as the clothes dryer test
  load weight in pounds divided by the sum of ``active mode'' per-cycle
  energy use and ``inactive mode'' per-cycle energy use in kWh.
* * CEER (Combined Energy Efficiency Ratio) is calculated as capacity
  times active mode hours (equal to 750) divided by the sum of active
  mode annual energy use and inactive mode.

B. Benefits and Costs to Consumers

    Table I-2 presents DOE's evaluation of the economic impacts of 
today's standards on consumers of clothes dryers and room air 
conditioners, as measured by the average life-cycle cost (LCC) savings 
and the median payback period. The average LCC savings are positive for 
all product classes of clothes dryers and room air conditioners for 
which consumers would be impacted by the standards.

 Table I-2--Impacts of Today's Standards on Consumers of Clothes Dryers
                        and Room Air Conditioners
------------------------------------------------------------------------
                                                              Median
                                           Average  LCC       payback
              Product class                   savings         period
                                              (2009$)         (years)
------------------------------------------------------------------------
                             Clothes Dryers
------------------------------------------------------------------------
Electric Standard.......................             $14             5.3
Compact 120V............................              14             0.9
Compact 240V............................               8             0.9
Gas.....................................               2            11.7
Ventless 240V...........................             * 0           * n/a
Ventless Combination Washer/Dryer.......             * 0           * n/a
------------------------------------------------------------------------
                          Room Air Conditioners
------------------------------------------------------------------------
< 6,000 Btu/h, with Louvers.............               7             8.6
8,000-13,999 Btu/h, with Louvers........              22             2.8
20,000-24,999 Btu/h, with Louvers.......               6             4.3
> 25,000 Btu/h, with Louvers............               1            10.1
8,000-10,999 Btu/h, without Louvers.....              13             2.1
> 11,000 Btu/h, without Louvers.........              11             3.7
------------------------------------------------------------------------
* Because the standard level is the same as the baseline efficiency
  level, no consumers are impacted and therefore calculation of a
  payback period is not applicable.

C. 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 (2011 to 2043). Using a real discount rate of 7.2 
percent, DOE estimates that the industry net present value (INPV) for 
manufacturers of clothes dryers is $1,003.6 million in 2009$. Under 
today's standards, DOE expects that manufacturers may lose 6.4 to 8.0 
percent of their INPV, which is $64.5 to -$80.6 million. Additionally, 
based on DOE's interviews with the manufacturers of clothes dryers, DOE 
does not expect any plant closings or significant loss of employment.
    For room air conditioners, DOE estimates that the INPV for 
manufacturers of room air conditioners is $956 million in 2009$ using a 
real discount rate of 7.2 percent. Under today's standards, DOE expects 
that manufacturers may lose 11.6 to 18.6 percent of their INPV, which 
is $111.3 to $177.6 million. Additionally, based on DOE's interviews 
with the manufacturers of room air conditioners, DOE does not expect 
any plant closings or significant loss of employment.

D. National Benefits

    DOE's analyses indicate that today's standards would save a 
significant amount of energy over 30 years (2014-

[[Page 22457]]

2043)--an estimated 0.39 quads of cumulative energy for clothes dryers 
and 0.31 quads of cumulative energy for room air conditioners. The 
combined total, 0.70 quads, is equivalent to three-fourths of the 
estimated amount of energy used in 2008 to dry clothes in all U.S. 
homes. In addition, DOE expects the energy savings from today's 
standards to eliminate the need for approximately 0.98 gigawatts (GW) 
of generating capacity by 2043.
    The cumulative national net present value (NPV) of total consumer 
costs and savings of today's standards in 2009$ ranges from $1.08 
billion (at a 7-percent discount rate) to $3.01 billion (at a 3-percent 
discount rate) for clothes dryers, and from $0.57 billion (at a 7-
percent discount rate) to $1.47 billion (at a 3-percent discount rate) 
for room air conditioners. This NPV expresses the estimated total value 
of future operating-cost savings minus the estimated increased product 
costs for products purchased in 2014-2043, discounted to 2011.
    In addition, today's standards would have significant environmental 
benefits. The energy savings would result in cumulative greenhouse gas 
emission reductions of approximately 36.1 million metric tons (Mt) of 
carbon dioxide (CO<INF>2</INF>) from 2014 to 2043. During this period, 
the standards would also result in emissions reductions \1\ of 
approximately 29.3 thousand tons of nitrogen oxides (NO<INF>X</INF>) 
and 0.073 ton of mercury (Hg).\2\ DOE estimates that the net present 
monetary value of the CO<INF>2</INF> emissions reductions is between 
$170 and $2,654 million, expressed in 2009$ and discounted to 2011. DOE 
also estimates that the net present monetary value of the 
NO<INF>X</INF> emissions reductions, expressed in 2009$ and discounted 
to 2011, is $4.3 to $43.8 million at a 7-percent discount rate, and 
$8.9 to $91.7 million at a 3-percent discount rate.\3\
---------------------------------------------------------------------------

    \1\ DOE calculates emissions reductions relative to the most 
recent version of the Annual Energy Outlook (AEO) Reference case 
forecast. As noted in section 15.2.4 of TSD chapter 15, this 
forecast accounts for regulatory emissions reductions through 2008, 
including the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 
2005)), but not the Clean Air Mercury Rule (CAMR, 70 FR 28606 (May 
18, 2005)). Subsequent regulations, including the currently proposed 
CAIR replacement rule, the Clean Air Transport Rule (75 FR 45210 
(Aug. 2, 2010)), do not appear in the forecast.
    \2\ Results for NO<INF>X</INF> and Hg are presented in short 
tons. One short ton equals 2000 lbs.
    \3\ DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential 
economic benefits of reduced Hg emissions. DOE has decided to await 
further guidance regarding consistent valuation and reporting of Hg 
emissions before it once again monetizes Hg emissions reductions in 
its rulemakings.
---------------------------------------------------------------------------

    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 2009$, 
of the benefits from operating the product (consisting primarily of 
operating cost savings from using less energy, minus increases in 
equipment purchase costs, which is another way of representing consumer 
NPV, plus (2) the monetary value of the benefits of emission 
reductions, including CO<INF>2</INF> emission reductions.\4\ The value 
of the CO<INF>2</INF> reductions is otherwise known as the Social Cost 
of Carbon (SCC), and is calculated using a range of values per metric 
ton of CO<INF>2</INF> developed by a recent interagency process. The 
monetary benefits of emissions reductions are reported in 2009$ so that 
they can be compared with the other costs and benefits in the same 
dollar units. The derivation of the SCC values is discussed in section 
IV.M.
---------------------------------------------------------------------------

    \4\ DOE used a two-step calculation process to convert the time-
series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2011, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO<INF>2</INF> 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in 2011, that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined would be a steady stream of 
payments.
---------------------------------------------------------------------------

    Although adding the value of consumer 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. consumer monetary savings that occur as a result of market 
transactions, while the value of CO<INF>2</INF> reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
timeframes for analysis. The national operating cost savings is 
measured for the lifetime of products shipped in 2014-2043. 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 carbon 
dioxide in each year. These impacts continue well beyond 2100.
    Table I-3 shows the annualized values for the clothes dryer 
standards. Using a 7-percent discount rate and the SCC value of $22.1/
ton in 2010 (in 2009$), the cost of the standards for clothes dryers in 
today's rule is $52.3 million per year in increased equipment costs, 
while the annualized benefits are $139.1 million per year in reduced 
equipment operating costs, $25.0 million in CO<INF>2</INF> reductions, 
and $0.9 million in reduced NO<INF>X</INF> emissions. In this case, the 
net benefit amounts to $112.7 million per year. DOE has calculated that 
the annualized increased equipment cost can range from $50.5 to $66.6 
million per year depending on assumptions and modeling of equipment 
price trends. The high end of this range corresponds to a constant real 
equipment price trend. Using the central estimate of energy-related 
benefits, DOE estimates that calculated net benefits can range from 
$98.4 to $114.5 million per year.
    Using a 3-percent discount rate and the SCC value of $22.1/ton in 
2010 (in 2009$), the cost of the standards for clothes dryers in 
today's rule is $55.4 million per year in increased equipment costs, 
while the benefits are $209.1 million per year in reduced operating 
costs, $25.0 million in CO<INF>2</INF> reductions, and $1.4 million in 
reduced NO<INF>X</INF> emissions. In this case, the net benefit amounts 
to $180.1 million per year. DOE has calculated that the annualized 
increased equipment cost can range from $53.1 to $73.5 million per year 
depending on assumptions and modeling of equipment price trends. The 
high end of this range corresponds to a constant real equipment price 
trend. Using the central estimate of energy-related benefits, DOE 
estimates that calculated net benefits can range from $162.0 to $182.4 
million per year.
    Table I-4 shows the annualized values for the room air conditioner 
standards. Using a 7-percent discount rate and the SCC value of $22.1/
ton in 2010 (in 2009$), the cost of the standards for room air 
conditioners in today's rule is $107.7 million per year in increased 
equipment costs, while the annualized benefits are $153.7 million per 
year in reduced equipment operating costs, $19.5 million in 
CO<INF>2</INF> reductions, and $0.999 million in reduced NO<INF>X</INF> 
emissions. In this case, the net benefit amounts to $66.4 million per 
year.
    DOE has calculated that the annualized increased equipment cost can 
range from $105.7 to $136.6 million per year depending on assumptions 
and modeling of equipment price trends. The high end of this range 
corresponds to a constant real equipment price trend. Using the central 
estimate of energy-related benefits, DOE estimates that calculated net 
benefits can range from $37.5 to $68.4 million per year.
    Using a 3-percent discount rate and the SCC value of $22.1/ton in 
2010 (in

[[Page 22458]]

2009$), the cost of the standards for room air conditioners in today's 
rule is $111.0 million per year in increased equipment costs, while the 
benefits are $186.2 million per year in reduced operating costs, $19.5 
million in CO<INF>2</INF> reductions, and $1.20 million in reduced 
NO<INF>X</INF> emissions. In this case, the net benefit amounts to 
$95.9 million per year DOE has calculated that the range in the 
annualized increased equipment cost can range from $108.0 to $146.0 
million per year depending on assumptions and modeling of equipment 
price trends. The high end of this range corresponds to a constant real 
equipment price trend. Using the central estimate of energy-related 
benefits, DOE estimates that calculated net benefits can range from 
$60.9 to $98.9 million per year.

                       Table I-3--Annualized Benefits and Costs of Amended Standards (TSL 4) for Clothes Dryers Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Monetized (million 2009$ year)
                                                        Discount rate      -----------------------------------------------------------------------------
                                                                               Primary estimate *          Low estimate *            High estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........................                       7%                     139.1                     120.6                     158.3
                                                                       3%                     209.1                     177.4                     241.3
CO2 Reduction at $4.9/t **......................                       5%                       6.0                       6.0                       6.0
CO2 Reduction at $22.1/t **.....................                       3%                      25.0                      25.0                      25.0
CO2 Reduction at $36.3/t **.....................                     2.5%                      39.8                      39.8                      39.8
CO2 Reduction at $67.1/t **.....................                       3%                      76.0                      76.0                      76.0
NOX Reduction at $2,519/ton **..................                       7%                       0.9                       0.9                       0.9
                                                                       3%                       1.4                       1.4                       1.4
    Total[dagger]...............................                 7% plus CO2 range   146.1 to 216.1            127.6 to 197.6            165.3 to 235.3
                                                                       7%                     165.0                     146.5                     184.3
                                                                       3%                     235.4                     203.7                     267.6
                                                                 3% plus CO2 range   216.5 to 286.5            184.8 to 254.8            248.7 to 318.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs<greek-i>..............                       7%                      52.3                      66.6                      50.5
                                                                       3%                      55.4                      73.5                      53.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total[dagger]...............................                 7% plus CO2 range    93.7 to 163.7             61.0 to 131.0            114.8 to 184.8
                                                                       7%                     112.7                      79.9                     133.8
                                                                       3%                     180.1                     130.2                     214.5
                                                                 3% plus CO2 range   161.1 to 231.1            111.3 to 181.3            195.6 to 265.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The primary, low, and high estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
  and High Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
  for equipment prices, and the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate sensitivity
  for the equipment price trend.
** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and
  $36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The
  value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2009$)
  is the average of the low and high values used in DOE's analysis.
[dagger] Total benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
  $22.1/ton in 2010 (in 2007$). 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.


                    Table I-4--Annualized Benefits and Costs of Amended Standards (TSL 4) for Room Air Conditioners Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Monetized (million 2009$/year)
                                                        Discount rate      -----------------------------------------------------------------------------
                                                                               Primary estimate *          Low estimate *            High estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........................                       7%                     153.7                     145.1                     161.9
                                                                       3%                     186.2                     174.2                     197.3
CO2 Reduction at $4.9/t **......................                       5%                       5.0                       5.0                       5.0
CO2 Reduction at $22.1/t **.....................                       3%                      19.5                      19.5                      19.5
CO2 Reduction at $36.3/t **.....................                     2.5%                      30.7                      30.7                      30.7
CO2 Reduction at $67.1/t **.....................                       3%                      59.4                      59.4                      59.4
NOX Reduction at $2,519/ton **..................                       7%                     0.999                     0.999                     0.999
                                                                       3%                     1.197                     1.197                     1.197
    Total [dagger]..............................                 7% plus CO2 range   159.6 to 214.0            151.1 to 205.5            167.9 to 222.3
                                                                       7%                     174.1                     165.5                     182.4
                                                                       3%                     206.8                     194.9                     218.0
                                                                 3% plus CO2 range   192.3 to 246.7            180.4 to 234.8            203.5 to 257.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 22459]]

 
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs.......................                       7%                     107.7                     136.6                     105.7
                                                                       3%                     111.0                     146.0                     108.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Total[dagger]...........................                 7% plus CO2 range    51.9 to 106.3              43.4 to 97.8             62.2 to 116.6
                                                                       7%                      66.4                      28.9                      76.7
                                                                       3%                      95.9                      48.9                     110.0
                                                                 3% plus CO2 range    81.4 to 135.8              34.4 to 88.8             95.5 to 149.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The primary, low, and high estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
  and High Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
  for equipment prices, while the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate
  sensitivity for the equipment price trend.
** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and
  $36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The
  value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2009$)
  is the average of the low and high values used in DOE's analysis.
[dagger] Total benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
  $22.1/ton in 2010 (in 2009$). 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.

E. Conclusion

    Based on the analyses culminating in this final rule, DOE found the 
benefits to the nation of the standards (energy savings, consumer LCC 
savings, national NPV increase, and emission reductions) outweigh the 
burdens (loss of INPV and LCC increases for some users of these 
products). DOE has concluded that the standards represent the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified, and would result in significant conservation of 
energy. DOE further notes that clothes dryers and room air conditioners 
achieving these standard levels are already commercially available.

II. Introduction

A. Authority

    Title III of EPCA sets forth a variety of provisions designed to 
improve energy efficiency. Part B of title III (42 U.S.C. 6291-6309) 
provides for the Energy Conservation Program for Consumer Products 
other than Automobiles.\5\ The program covers consumer products and 
certain commercial equipment (referred to hereafter as ``covered 
products''), including clothes dryers and room air conditioners (42 
U.S.C. 6292(a)(2) and (8)), and the Act prescribes energy conservation 
standards for certain clothes dryers (42 U.S.C. 6295(g)(3)) and for 
room air conditioners (42 U.S.C. 6295(c)(1)). EPCA further directs DOE 
to conduct two cycles of rulemakings to determine whether to amend 
these standards. (42 U.S.C. 6295(c)(2) and (g)(4)) As explained in 
further detail in section II.C, ``Background,'' this rulemaking 
represents the second round of amendments to both the clothes dryer and 
room air conditioner standards.
---------------------------------------------------------------------------

    \5\ For editorial reasons, upon codification in the U.S. Code, 
Part B was re-designated Part A.
---------------------------------------------------------------------------

    DOE notes that this rulemaking is one of the required agency 
actions in the consolidated Consent Decree in State of New York, et al. 
v. Bodman et al., 05 Civ. 7807 (LAP), and Natural Resources Defense 
Council, et al. v. Bodman, et al., 05 Civ. 7808 (LAP), DOE is required 
to complete a final rule for amended energy conservation standards for 
room air conditioners and clothes dryers that must be sent to the 
Federal Register by June 30, 2011.
    Under the Act, DOE's energy conservation program for covered 
products consists essentially of four parts: (1) Testing, (2) labeling, 
(3) Federal energy conservation standards, and (4) certification and 
enforcement procedures. The Federal Trade Commission (FTC) is 
responsible for labeling, and DOE implements the remainder of the 
program. The Act authorizes DOE, subject to certain criteria and 
conditions, 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 DOE test procedure as the basis for certifying to DOE that 
their products comply with applicable energy conservation standards 
adopted under EPCA and for representing the 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 under EPCA. Id. The test procedures for clothes dryers and room 
air conditioners appear at title 10 Code of Federal Regulations (CFR) 
part 430, subpart B, appendices D and F, respectively.
    EPCA provides 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 economically 
justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, EPCA precludes DOE 
from adopting any standard that would not result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)) EPCA also provides that, 
in determining whether a 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 do so 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

[[Page 22460]]

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 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 conservation; and
    7. Other factors the Secretary considers relevant. (42 U.S.C. 
6295(o)(2)(B)(i)(I)-(VII))
    The Energy Independence and Security Act of 2007 (EISA 2007; Public 
Law 110-140) amended EPCA, in relevant part, to grant DOE authority to 
issue a final rule (hereinafter referred to as a ``direct final rule'') 
establishing an energy conservation standard on receipt of a statement 
submitted jointly by interested persons that are fairly representative 
of relevant points of view (including representatives of manufacturers 
of covered products, States, and efficiency advocates) as determined by 
the Secretary, that contains recommendations with respect to an energy 
conservation standard that are in accordance with the provisions of 42 
U.S.C. 6295(o). A notice of proposed rulemaking (NOPR) that proposes an 
identical energy efficiency standard must be published simultaneously 
with the final rule, and DOE must provide a public comment period of at 
least 110 days on this proposal. 42 U.S.C. 6295(p)(4). Not later than 
120 days after issuance of the direct final rule, if one or more 
adverse comments or an alternative joint recommendation are received 
relating to the direct final rule, the Secretary must determine whether 
the comments or alternative recommendation may provide a reasonable 
basis for withdrawal under 42 U.S.C. 6295(o) or other applicable law. 
If the Secretary makes such a determination, DOE must withdraw the 
direct final rule and proceed with the simultaneously published notice 
of proposed rulemaking. DOE must publish in the Federal Register the 
reason why the direct final rule was withdrawn. Id.
    The Consent Decree in State of New York, et al. v. Bodman et al., 
described above, defines a ``final rule'' to have the same meaning as 
in 42 U.S.C. 6295(p)(4) and defines ``final action'' as a final 
decision by DOE. As this direct final rule is issued under authority at 
42 U.S.C. 6295(p)(4) and constitutes a final decision by DOE which 
becomes legally effective 120 days after issuance, absent an adverse 
comment that leads the Secretary to withdraw the direct final rule, DOE 
asserts that issuance of this direct final rule on or before the date 
required by the court constitutes compliance with the Consent Decree in 
State of New York, et al. v. Bodman et al.
    Furthermore, EPCA contains what is commonly known as an ``anti-
backsliding'' provision, which mandates that the Secretary not 
prescribe 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 a 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) with performance characteristics, 
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))
    EPCA also 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)
    EPCA requires DOE to specify a different standard level than that 
which applies generally to a 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. 6295(q)(1)) In 
determining whether a performance-related feature justifies such 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 for covered products 
generally supersede state laws or regulations concerning energy 
conservation testing, labeling, and standards. (42 U.S.C. 6297 (a)-(c)) 
DOE can, however, grant waivers of Federal preemption for particular 
state laws or regulations, in accordance with the procedures and other 
provisions of section 327(d) of the Act. (42 U.S.C. 6297(d))
    EPCA also requires that energy conservation standards address 
standby mode and off mode energy use. Specifically, when DOE adopts a 
standard for a covered product after July 1, 2010 it must, if justified 
by the criteria for adoption of standards in section 325(o) of EPCA, 
incorporate standby mode and off mode energy use into the standard, if 
feasible, or adopt a separate standard for such energy use for that 
product. (42 U.S.C. 6295(gg)) As set forth below, the standards for 
clothes dryers and room air conditioners at 10 CFR 430.32 (h) and (b) 
are minimum energy factors (EF) and minimum energy efficiency ratios 
(EER), respectively. Neither of these metrics incorporates standby or 
off mode energy use, with the limited exception that the EF in appendix 
D addresses the energy use of pilot lights in gas clothes dryers. (DOE 
notes that standing pilot lights were prohibited by EPCA for products 
manufactured after January 1, 1988. As a result, the final amended test 
procedure, published on January 6, 2011, eliminates measurement of the 
energy use of such pilot lights. Similarly, DOE does not incorporate 
the energy use of pilot lights in the metric for gas clothes dryers 
established in this final rule.) By contrast, the standard levels DOE 
considered in this direct final rule are expressed in terms of the 
``combined energy factor'' (CEF) for clothes dryers and the ``combined 
energy efficiency ratio'' (CEER) for room air conditioners, and each of 
these metrics incorporates energy use in all modes, including the 
standby and off modes. DOE uses these metrics in the standards it 
adopts in this direct final rule.
    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

[[Page 22461]]

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.
    We emphasize 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 direct final rule is consistent 
with these principles, including that, to the extent permitted by law, 
agencies adopt a regulation only upon a reasoned determination that its 
benefits justify its costs and select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits.
    Consistent with EO 13563, and the range of impacts analyzed in this 
rulemaking, the energy efficiency standard adopted herein by DOE 
achieves maximum net benefits.

B. Background

1. Current Standards
    In a final rule published on May 14, 1991, DOE prescribed the 
current Federal energy conservation standards for clothes dryers 
manufactured on or after May 14, 1994. 56 FR 22250. This rule completed 
the first of the two rulemakings required under 42 U.S.C. 6295(g)(4) to 
consider amending the standards for clothes dryers. The current 
standards consist of four minimum EFs, expressed in pounds of clothing 
load (lb) per kilowatt-hour (kWh), one for gas dryers and one each for 
three different types of electric dryers. 10 CFR 430.32(h). These 
standards are set forth in Table II.1 below.

    Table II.1--Residential Clothes Dryer Current Energy Conservation
                                Standards
------------------------------------------------------------------------
                       Product class                          EF lb/kWh
------------------------------------------------------------------------
Electric, Standard (4.4 cubic feet (ft\3\) or greater               3.01
 capacity).................................................
Electric, Compact (120 V) (less than 4.4 ft\3\ capacity)...         3.13
Electric, Compact (240 V) (less than 4.4 ft\3\ capacity)...         2.90
Gas........................................................         2.67
------------------------------------------------------------------------

    In a final rule published on September 24, 1997, DOE prescribed the 
current Federal energy conservation standards for room air conditioners 
manufactured on or after October 1, 2000. 62 FR 50122. This rule 
completed the first of the two rulemakings required under 42 U.S.C. 
6295(c)(2) to consider amending the standards for room air 
conditioners. The current standards consist of minimum EERs, expressed 
as cooling capacity in British thermal units (Btu) per hour (h) divided 
by electrical input power in watts (W), that vary depending on the size 
of the room air conditioner, whether it has louvered sides and a 
heating cycle, and whether it is for casement installations. 10 CFR 
430.32(b). These standards are set forth in Table II.2 below.

 Table II.2--Room Air Conditioner Current Energy Conservation Standards
------------------------------------------------------------------------
                       Product class                         EER  Btu/Wh
------------------------------------------------------------------------
Without reverse cycle, with louvered sides, and less than            9.7
 6,000 Btu/h...............................................
Without reverse cycle, with louvered sides, and 6,000 to             9.7
 7,999 Btu/h...............................................
Without reverse cycle, with louvered sides, and 8,000 to             9.8
 13,999 Btu/h..............................................
Without reverse cycle, with louvered sides, and 14,000 to            9.7
 19,999 Btu/h..............................................
Without reverse cycle, with louvered sides, and 20,000 Btu/          8.5
 h or more.................................................
Without reverse cycle, without louvered sides, and less              9.0
 than 6,000 Btu/h..........................................
Without reverse cycle, without louvered sides, and 6,000 to          9.0
 7,999 Btu/h...............................................
Without reverse cycle, without louvered sides, and 8,000 to          8.5
 13,999 Btu/h..............................................
Without reverse cycle, without louvered sides, and 14,000            8.5
 to 19,999 Btu/h...........................................
Without reverse cycle, without louvered sides, and 20,000            8.5
 Btu/h or more.............................................
With reverse cycle, with louvered sides, and less than               9.0
 20,000 Btu/h..............................................
With reverse cycle, without louvered sides, and less than            8.5
 14,000 Btu/h..............................................
With reverse cycle, with louvered sides, and 20,000 Btu/h            8.5
 or more...................................................
With reverse cycle, without louvered sides, and 14,000 Btu/          8.0
 h or more.................................................
Casement-Only..............................................          8.7
Casement-Slider............................................          9.5
------------------------------------------------------------------------


[[Page 22462]]

2. History of Standards Rulemaking for Residential Clothes Dryers and 
Room Air Conditioners
    EPCA prescribes energy conservation standards for clothes dryers 
and for room air conditioners, consisting of a requirement that gas 
clothes dryers manufactured after January 1, 1988 not be equipped with 
constant burning pilots and performance standards (minimum EER levels) 
for room air conditioners. (42 U.S.C. 6295(c)(1) and (g)(3)) These 
amendments also required, for both products, that DOE conduct two 
cycles of rulemakings to determine whether to amend these standards. 
(42 U.S.C. 6295(c)(2) and (g)(4)) As indicated above, DOE completed the 
first of these rulemaking cycles for clothes dryers in 1991, by 
adopting performance standards for gas and electric products. DOE 
completed the first of these rulemaking cycles for room air 
conditioners in 1997 by adopting amended minimum EER levels.
    DOE initiated this rulemaking on October 9, 2007 by publishing a 
notice announcing the availability of the framework document, the 
``Energy Conservation Standards Rulemaking Framework Document for 
Residential Clothes Dryers and Room Air Conditioners.'' In this notice, 
DOE also announced a public meeting and requested public comment on the 
matters raised in the framework document. 72 FR 57254 (October 9, 
2007). The framework document describes the procedural and analytical 
approaches that DOE anticipated using to evaluate energy conservation 
standards for clothes dryers and room air conditioners, and identified 
various issues to be resolved in conducting this rulemaking. The 
framework document is available at http://www1.eere.energy.gov/buildings/appliance_standards/.
    DOE held the public meeting on October 24, 2007 to present the 
contents of the framework document, describe the analyses it planned to 
conduct during the rulemaking, seek comments from interested parties on 
these subjects, and, in general, inform interested parties about, and 
facilitate their involvement in, the rulemaking. Interested parties 
discussed the following major issues at the public meeting: test 
procedure revisions; product classes; technology options; approaches to 
the engineering, life-cycle cost, payback period and national impact 
analyses; efficiency levels analyzed in the engineering analysis; and 
the approach for estimating typical energy consumption. At the meeting 
and during the period for commenting on the framework document, DOE 
received many comments that helped it identify and resolve issues 
involved in this rulemaking.
    DOE then gathered additional information and performed preliminary 
analyses to help develop potential energy conservation standards for 
clothes dryers and room air conditioners. This process culminated in 
DOE's announcement of the availability of its preliminary technical 
support document (preliminary TSD) and another public meeting to 
discuss and receive comments on the following matters: the product 
classes DOE planned to analyze; the analytical framework, models, and 
tools that DOE was using to evaluate standards; the results of the 
preliminary analyses performed by DOE; and potential standard levels 
that DOE could consider. 75 FR 7987 (Feb. 23, 2010) (the February 2010 
notice). DOE also invited written comments on the preliminary analysis. 
Id. (The preliminary TSD is available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/preliminary_analysis_tsd.html.) DOE also stated its interest in receiving views concerning 
other relevant issues that participants believe would affect energy 
conservation standards for clothes dryers or room air conditioners. Id. 
at 7990.
    The preliminary TSD provided an overview of the activities DOE 
undertook in developing standards for clothes dryers and room air 
conditioners, and discussed the comments DOE received in response to 
the framework document. It also described the analytical framework that 
DOE uses in this rulemaking, including a description of the 
methodology, the analytical tools, and the relationships among the 
various analyses that are part of the rulemaking. The preliminary TSD 
presented and described in detail each analysis DOE performed, 
including descriptions of inputs, sources, methodologies, and results. 
These analyses were as follows:
    <bullet> A market and technology assessment addressed the scope of 
this rulemaking, identified the potential classes for clothes dryers 
and room air conditioners, characterized the markets for these 
products, and reviewed techniques and approaches for improving their 
efficiency.
    <bullet> A screening analysis reviewed technology options to 
improve the efficiency of clothes dryers and room air conditioners, and 
weighed these options against DOE's four prescribed screening criteria.
    <bullet> An engineering analysis estimated the manufacturer selling 
prices (MSPs) associated with more energy-efficient clothes dryers and 
room air conditioners.
    <bullet> An energy use analysis estimated the annual energy use of 
clothes dryers and room air conditioners.
    <bullet> A markups analysis converted estimated MSPs derived from 
the engineering analysis to consumer prices.
    <bullet> A life-cycle cost analysis calculated, for individual 
consumers, the discounted savings in operating costs throughout the 
estimated average life of each product, compared to any increase in 
installed costs likely to result directly from the imposition of a 
given standard.
    <bullet> A payback period (PBP) analysis estimated the amount of 
time it takes individual consumers to recover the higher purchase 
expense of more energy efficient products through lower operating 
costs.
    <bullet> A shipments analysis estimated shipments of clothes dryers 
and room air conditioners over the time period examined in the 
analysis, and was used in performing the national impact analysis 
(NIA).
    <bullet> A national impact analysis assessed the national energy 
savings (NES), and the national net present value of total consumer 
costs and savings, expected to result from specific, potential energy 
conservation standards for clothes dryers and room air conditioners. 
and
    <bullet> A preliminary manufacturer impact analysis (MIA) took the 
initial steps in evaluating the effects on manufacturers of new amended 
energy conservation standards.
    The public meeting announced in the February 2010 notice took place 
on March 16, 2010. At this meeting, DOE presented the methodologies and 
results of the analyses set forth in the preliminary TSD. Major topics 
discussed at the meeting included test procedure revisions; product 
classes (including ventless clothes dryers); integrated efficiency 
levels; the use of alternate refrigerants in room air conditioners; 
engineering analysis tools; mark-ups; field energy consumption; life-
cycle cost inputs; efficiency distribution forecasts; national impact 
analysis inputs; and trial standard level selection criteria. DOE also 
discussed plans for conducting the NOPR analyses. The comments received 
since publication of the February 2010 notice, including those received 
at the March 2010 public meeting, have contributed to DOE's proposed 
resolution of the issues in this rulemaking. This direct final rule 
responds to the issues raised in the comments received.

[[Page 22463]]

3. Consensus Agreement for Residential Clothes Dryers and Room Air 
Conditioners
    In response to the preliminary analysis, DOE received the 
``Agreement on Minimum Federal Efficiency Standards, Smart Appliances, 
Federal Incentives and Related Matters for Specified Appliances'' (the 
``Joint Petition''), a comment submitted by groups representing 
manufacturers (the Association of Home Appliance Manufacturers (AHAM), 
Whirlpool Corporation (Whirlpool), General Electric Company (GE), 
Electrolux, LG Electronics, Inc. (LG), BSH Home Appliances (BSH), 
Alliance Laundry Systems (ALS), Viking Range, Sub-Zero Wolf, Friedrich 
A/C, U-Line, Samsung, Sharp Electronics, Miele, Heat Controller, AGA 
Marvel, Brown Stove, Haier, Fagor America, Airwell Group, Arcelik, 
Fisher & Paykel, Scotsman Ice, Indesit, Kuppersbusch, Kelon, and 
DeLonghi); energy and environmental advocates (American Council for an 
Energy Efficient Economy (ACEEE), Appliance Standards Awareness Project 
(ASAP), Natural Resources Defense Council (NRDC), Alliance to Save 
Energy (ASE), Alliance for Water Efficiency (AWE), Northwest Power and 
Conservation Council (NPCC), and Northeast Energy Efficiency 
Partnerships (NEEP)); and consumer groups (Consumer Federation of 
America (CFA) and the National Consumer Law Center (NCLC)) 
(collectively, the ``Joint Petitioners''). This collective set of 
comments, which DOE refers to in this notice as the ``Joint Petition'' 
1B \6\ or ``Consensus Agreement'' recommends specific energy 
conservation standards for residential clothes dryers and room air 
conditioners that, in the commenters' view, would satisfy the EPCA 
requirements in 42 U.S.C. 6295(o). DOE has considered the recommended 
energy conservation standards in today's final rule.
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    \6\ DOE Docket No. EERE-2007-BT-STD-0010, Comment 35. DOE 
considered the Joint Petitioners comments to supersede earlier 
comments by the listed parties regarding issues subsequently 
discussed in the Joint Petition.
---------------------------------------------------------------------------

    After careful consideration of the joint comment containing a 
consensus recommendation for amended energy conservation standards for 
clothes dryers and room air conditioners, the Secretary has determined 
that this ``Consensus Agreement'' has been submitted by interested 
persons who are fairly representative of relevant points of view on 
this matter. Congress provided some guidance within the statute itself 
by specifying that representatives of manufacturers of covered 
products, States, and efficiency advocates are relevant parties to any 
consensus recommendation. (42 U.S.C. 6295(p)(4)(A)) As delineated 
above, the Consensus Agreement was signed and submitted by a broad 
cross-section of the manufacturers who produce the subject products, 
their trade associations, and environmental, energy-efficiency and 
consumer advocacy organizations. Although States were not signatories 
to the Consensus Agreement, they did not express any opposition to it. 
Moreover, DOE does not read the statute as requiring absolute agreement 
among all interested parties before the Department may proceed with 
issuance of a direct final rule. By explicit language of the statute, 
the Secretary has discretion to determine when a joint recommendation 
for an energy or water conservation standard has met the requirement 
for representativeness (i.e., ``as determined by the Secretary''). 
Accordingly, DOE will consider each consensus recommendation on a case-
by-case basis to determine whether the submission has been made by 
interested persons fairly representative of relevant points of view.
    Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also determine 
whether a jointly-submitted recommendation for an energy or water 
conservation standard is in accordance with 42 U.S.C. 6295(o) or 42 
U.S.C. 6313(a)(6)(B), as applicable. This determination is exactly the 
type of analysis which DOE conducts whenever it considers potential 
energy conservation standards pursuant to EPCA. DOE applies the same 
principles to any consensus recommendations it may receive to satisfy 
its statutory obligation to ensure that any energy conservation 
standard that it adopts achieves the maximum improvement in energy 
efficiency that is technologically feasible and economically justified 
and will result in significant conservation of energy, Upon review, the 
Secretary determined that the Consensus Agreement submitted in the 
instant rulemaking comports with the standard-setting criteria set 
forth under 42 U.S.C. 6295(o). Accordingly, the consensus agreement 
levels were included as TSL 4 in today's rule for both clothes dryers 
and room air conditioners, the details of which are discussed at 
relevant places throughout this document.
    In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have 
been satisfied, the Secretary has determined that it is appropriate to 
adopt amended energy conservation standards for clothes dryers and room 
air conditioners through this direct final rule
    As required by the same statutory provision, DOE is also 
simultaneously publishing a NOPR which proposes the identical standard 
levels contained in this direct final rule with a 110-day public 
comment period. DOE will consider whether any comment received during 
this comment period is sufficiently ``adverse'' as to provide a 
reasonable basis for withdrawal of the direct final rule and 
continuation of this rulemaking under the NOPR. Typical of other 
rulemakings, it is the substance, rather than the quantity, of comments 
that will ultimately determine whether a direct final rule will be 
withdrawn. To this end, the substance of any adverse comment(s) 
received will be weighed against the anticipated benefits of the 
Consensus Agreement and the likelihood that further consideration of 
the comment(s) would change the results of the rulemaking. DOE notes 
that to the extent an adverse comment had been previously raised and 
addressed in the rulemaking proceeding, such a submission will not 
typically provide a basis for withdrawal of a direct final rule.

III. General Discussion

A. Test Procedures

    As noted above, DOE's test procedures for clothes dryers and room 
air conditioners appear at 10 CFR part 430, subpart B, appendices D and 
F, respectively. Moreover, EPCA requires DOE to amend its test 
procedures for all covered products, including those for clothes dryers 
and room air conditioners, to include measurement of standby mode and 
off mode energy consumption, except where current test procedures fully 
address such energy consumption or such a procedure is technically 
infeasible. (42 U.S.C. 6295(gg)(2)) Because the clothes dryer and room 
air conditioner test procedures previously covered such energy use only 
as to pilot lights in gas dryers (as noted above, the final test 
procedure rule eliminates the measurement of this energy use given the 
statutory prohibition), on December 1, 2008 DOE issued a NOPR in which 
it proposed revisions of these test procedures to fully address standby 
and off mode energy use and sought comment on those revisions. 73 FR 
74639 (Dec. 9, 2008) (TP NOPR). DOE also held a public meeting on 
December 17, 2008 to receive oral comments.
    DOE subsequently issued a supplemental NOPR (SNOPR) in that 
rulemaking, in which it (1) addressed comments received in response to 
the TP NOPR; (2) proposed adoption of certain definitions and 
calculation

[[Page 22464]]

methods for standby and off mode energy use; and (3) proposed several 
amendments to the clothes dryer and room air conditioner test 
procedures concerning the active modes of these products. 75 FR 37594 
(June 29, 2010) (TP SNOPR). For air conditioners, these proposed 
amendments would update references to industry test standards. Id. at 
37598. For clothes dryers, DOE proposed to amend its test procedures 
for the active mode by adopting methods that would allow the testing of 
ventless products and would more accurately account for automatic cycle 
termination. Id. at 35798, 35799. DOE also proposed amendments to 
reflect the current usage and capabilities of products (for example, 
clothes dryer use cycles per year, remaining moisture content (RMC) of 
clothes dryer loads, and load sizes), and to update test cloth 
preconditioning provisions, eliminate reference to an obsolete industry 
test standard, and clarify the required gas supply pressure for testing 
gas clothes dryers. Id. DOE sought and received written comments on the 
TP SNOPR and also held a public meeting on July 14, 2010 to receive 
oral comments.
    On January 6, 2011, DOE published in the Federal Register a final 
rule for the test procedure rulemaking (76 FR 972) (TP Final Rule), in 
which it (1) adopted the provisions for the measurement of standby mode 
and off mode power use for both products proposed in the TP NOPR, as 
modified by the TP SNOPR, but required that products be installed and 
set up for standby and off mode testing in accordance with 
manufacturers' instructions (and if no instructions are given, then the 
appliance shall be tested at the factory or ``default'' settings); and 
(2) adopted several amendments to the clothes dryer and room air 
conditioner test procedures concerning the active mode for these 
products, as proposed in and informed by public comment on the TP 
SNOPR. 76 FR 972 (January 6, 2011). Specifically for room air 
conditioners, the amendments adopted in the TP Final Rule updated the 
references to industry test standards. Specifically for clothes dryers, 
DOE adopted the amendments to include provisions for the testing of 
ventless products proposed in the TP SNOPR, along with additional 
clarifications regarding the testing conditions for ventless clothes 
dryers. 76 FR 976-7. The amendments also include the following changes 
to reflect the current usage and capabilities of products: (1) Changing 
the annual clothes dryer use cycles from 416 to 283 cycle per year, (2) 
changing the initial RMC of clothes dryer loads from 70 percent <plus-
minus> 3.5 percent to 57.5 percent <plus-minus>3.5 percent, and (3) 
changing the clothes dryer test load size from 7.00 pounds (lbs) <plus-
minus> .07 lbs to 8.45 <plus-minus> .085 lbs for standard-size clothes 
dryers. 76 FR 977. The TP Final Rule also amends the DOE clothes dryer 
test procedure by updating test cloth preconditioning provisions; 
revising the water temperature for test load preparation from 100 
degrees Fahrenheit ([deg]F) <plus-minus> 5 [deg]F to 60 [deg]F <plus-
minus> 5 [deg]F; updating references to industry test standards; 
eliminating reference to an obsolete industry test standard; clarifying 
the required gas supply conditions for testing gas clothes dryers; 
clarifying the provisions for measuring the drum capacity; clarifying 
the definition of ``automatic termination control'' for clothes dryers; 
and adding the calculations of EF and CEF to 10 CFR part 430, subpart 
B, appendix D1. 76 FR 978.
    DOE did not adopt the amendments to more accurately measure 
automatic cycle termination proposed in the TP SNOPR. As discussed in 
the TP Final Rule, DOE conducted testing of representative clothes 
dryers using the automatic cycle termination test procedure proposed in 
the TP SNOPR. The results showed that all of the clothes dryers tested 
significantly over-dried the DOE test load to near bone dry and, as a 
result, the measured EF values were significantly lower than EF values 
obtained using the existing DOE test procedure. The test data also 
indicated that dryers equipped with automatic termination controls were 
less efficient than timer dryers. 76 FR 977.
    As noted in the TP Final Rule, DOE believes the test procedure 
amendments for automatic cycle termination proposed in the TP SNOPR do 
not adequately measure the energy consumption of clothes dryers 
equipped with such systems using the test load specified in the DOE 
test procedure. DOE believes that clothes dryers with automatic 
termination sensing control systems, which infer the RMC of the load 
from the properties of the exhaust air such as temperature and 
humidity, may be designed to stop the cycle when the consumer load has 
a higher RMC than the RMC obtained using the proposed automatic cycle 
termination test procedure in conjunction with the existing test 
load.\7\ Manufacturers have indicated, however, that test load types 
and test cloth materials different than those specified in the DOE test 
procedure do not produce results as repeatable as those obtained using 
the test load as currenty specified. Id.
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    \7\ To investigate this, DOE conducted additional testing using 
a test load similar to that specified in AHAM Standard HLD-1-2009, 
which consists of cotton bed sheets, towels, and pillow cases. For 
tests using the same automatic cycle termination settings as were 
used in the testing described earlier (that is, normal cycle setting 
and highest temperature setting), the alternate test load was dried 
to 1.7 to 2.2 percent final RMC, with an average RMC of 2.0 percent. 
In comparison, the same clothes dryer under the same cycle settings 
dried the DOE test load to 0.3 to 1.2 percent RMC, with an average 
RMC of 0.7 percent. Thus, DOE concluded that the proposed automatic 
cycle termination control test procedures may not stop at an 
appropriate RMC when used with the current test load.
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    In addition, DOE presented data in the test procedure final rule 
published on May 19, 1981 from a field use survey conducted by AHAM as 
well as an analysis of field test data on automatic termination control 
dryers conducted by the National Bureau of Standards (now known as the 
National Institute of Standards and Technology (NIST)). Analysis of 
this data showed that clothes dryers equipped with an automatic cycle 
termination feature consume less energy than timer dryers by reducing 
over-drying. 46 FR 27324 (May 19, 1981).
    For these reasons, DOE stated in the TP Final Rule that the test 
procedure amendments for automatic cycle termination proposed in the TP 
SNOPR do not adequately measure the energy consumption of clothes 
dryers equipped with such systems. As a result, DOE did not adopt the 
amendments for automatic cycle termination proposed in the TP SNOPR. 76 
FR 972, 977 (January 6, 2011).
    The following sections discuss the comments received in response to 
the preliminary analyses regarding the test procedures for clothes 
dryers and room air conditioners.
1. Clothes Dryer Test Procedure
    ACEEE and Earthjustice (EJ) both commented that the DOE test 
procedure inadequately represents field energy use, seriously hindering 
efforts to develop effective regulations and sound public policy, and 
produces misleading information for consumers and other interested 
parties. (ACEEE, No. 24 at p. 2; EJ, No. 28 at p. 1) \8\ ACEEE provided 
suggested test procedure changes, which are outlined in its comments 
and discussed in the sections below. ACEEE stated these suggested test 
procedure changes would improve the understanding of the overall 
contribution of clothes dryers to national energy consumption, the

[[Page 22465]]

relative performance of products currently on the market, and 
opportunities to improve clothes dryer energy performance (including 
the potential of the design options defined in DOE's analysis). ACEEE 
stated that its suggested test procedure changes would provide DOE 
better data for determining the appropriate level for standards that 
yield the maximum cost-effective energy savings for consumers. (ACEEE, 
No. 24 at p. 2) Earthjustice commented that DOE should correct errors 
in the existing test procedure that, according to Earthjustice, 
misstate the actual clothes dryer energy consumption, as identified in 
the report by ECOS Consulting (ECOS) (prepared for the NRDC),\9\ and 
recalculate the estimates of clothes dryer energy use. (EJ, No. 28 at 
p. 1) As discussed above, DOE recently published the TP Final Rule 
amending its clothes dryer test procedure to address many of the test 
procedure issues identified by ACEEE and Earthjustice. DOE addresses 
each of these issues individually in the sections below.
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    \8\ A notation in the form ``ACEEE, No. 24 at p. 2'' identifies 
a written comment (1) made by the American Council for an Energy 
Efficient Economy (ACEEE), (2) recorded in document number 24 that 
is filed in the docket of this rulemaking, and (3) which appears on 
page 2 of document number 24.
    \9\ NRDC, No. 30 at pp. 1-40.
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a. Standby Mode and Off Mode
Referenced Standards
    EPCA directs DOE to amend its test procedures to include measures 
of standby mode and off mode energy consumption. EPCA further directs 
DOE to amend the test procedures to integrate such energy consumption 
into a single energy descriptor for that product. If that is 
technically infeasible, DOE must prescribe a separate standby mode and 
off mode energy-use test procedure, if technically feasible. (42 U.S.C. 
6295(gg)(2)(A)) Any such amendment must consider the most current 
versions of the International Electrotechnical Commission (IEC) 
Standard 62301 [``Household electrical appliances--Measurement of 
standby power,'' First Edition 2005-06] and IEC Standard 62087 
[``Methods of measurement for the power consumption of audio, video, 
and related equipment,'' Second Edition 2008-09].\10\ Id.
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    \10\ DOE considered IEC Standard 62087 and determined that this 
standard addresses the methods of measuring the power consumption of 
audio, video, and related equipment and is therefore inapplicable to 
the products covered in this rulemaking.
---------------------------------------------------------------------------

    AHAM supported DOE's evaluation of the most current draft version 
of IEC Standard 62301 Second Edition, which at the time of the 
preliminary analysis for the standards rulemaking was designated as the 
Committee Draft for Vote (IEC Standard 62301 CDV), for potential 
revisions to address standby mode and off mode power in DOE's clothes 
dryer test procedure. AHAM commented that DOE would thus harmonize with 
international standards, including those used in Canada and Europe. 
(AHAM, Public Meeting Transcript, No. 21.4 at p. 30).\11\
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    \11\ A notation in the form ``AHAM, Public Meeting Transcript, 
No. 21.4 at p. 30'' identifies an oral comment that DOE received 
during the March 16, 2010 public meeting and which was recorded in 
the public meeting transcript in the docket for this rulemaking 
(Docket No. EE-2007-BT-STD-0010), maintained in the Resource Room of 
the Building Technologies Program. This particular notation refers 
to a comment (1) made by the Association of Home Appliance 
Manufacturers (AHAM) during the public meeting, (2) recorded in 
document number 21.4, which is the public meeting transcript that is 
filed in the docket of this rulemaking, and (3) which appears on 
page 30 of document number 21.4.
---------------------------------------------------------------------------

    In the TP NOPR, DOE discussed that IEC Standard 62301 Second 
Edition was expected at that time to be published in July 2009. For 
this reason, DOE stated in the TP NOPR that IEC Standard 62301 First 
Edition would be the ``current version'' at the time of publication of 
the final rule, so consideration thereof would comply with EPCA. DOE 
incorporated sections from IEC Standard 62301 First Edition in the 
proposed amendments to the clothes dryer test procedure in the TP NOPR. 
73 FR 74639, 74644 (Dec. 9, 2008). DOE did not receive any comments in 
response to the TP NOPR objecting to the proposed testing methods and 
procedures referenced in IEC Standard 62301 First Edition. Therefore, 
the TP SNOPR did not affect DOE's proposal in the TP NOPR to 
incorporate by reference clauses from IEC Standard 62301 First Edition. 
75 FR 37594, 37602 (June 29, 2010). In the TP Final Rule, DOE noted 
that the most recent draft of IEC Standard 62301 Second Edition, 
designated as the Final Draft International Standard (IEC Standard 
62301 FDIS) had yet to be made available on IEC's public Web site and 
that IEC Standard 62301 Second Edition is now projected to be issued in 
April 2011. For the reasons stated in the TP Final Rule, DOE amended 
its test procedures for clothes dryers in the final rule to incorporate 
by reference the clauses from IEC Standard 62301 First Edition proposed 
in the TP SNOPR. DOE also adopted the definitions of ``active mode,'' 
``standby mode,'' and ``off mode'' based on the language presented in 
IEC Standard 62301 CDV. 76 FR 972, 976-977 (January 6, 2011). DOE may 
consider incorporating by reference clauses from IEC Standard 62301 
Second Edition when that version has been published.
Testing Procedures
    As discussed in the Referenced Standards section, EPCA directs DOE 
to amend the test procedures to integrate such energy consumption into 
a single energy descriptor for that product. If that is technically 
infeasible, DOE must prescribe a separate standby mode and off mode 
energy-use test procedure, if technically feasible. (42 U.S.C. 
6295(gg)(2)(A)) In the TP NOPR, DOE determined that it is technically 
feasible to incorporate measures of standby mode and off mode energy 
use into the overall energy use metric. 73 FR 74639, 74650 (Dec. 9, 
2008). In the TP NOPR, DOE proposed to adopt the 140 hours associated 
with drying as the active mode hours and to associate the remaining 
8,620 hours of the year with standby mode and off mode. 73 FR 74639, 
74647 (Dec. 9, 2008). In the TP NOPR, DOE also proposed definitions and 
testing methods for multiple standby modes, including ``inactive 
mode,'' ``delay start mode,'' and ``cycle finished mode.'' \12\ 73 FR 
74639, 74647-48 (Dec. 9, 2008). DOE proposed to calculate clothes dryer 
energy use per cycle associated with standby mode and off mode by (1) 
calculating the product of wattage and allocated hours for all possible 
standby modes and off modes; (2) summing the results; (3) dividing the 
sum by 1,000 to convert from watt-hours (Wh) to kWh; and (4) dividing 
by the number of cycles per year. 73 FR 74639, 74648 (Dec. 9, 2008). In 
the TP NOPR, DOE reported that the comparison of annual energy use of 
different clothes dryer modes showed that delay start and cycle 
finished modes represent a negligible percentage of total annual energy 
consumption. The comparison also showed that the power levels in these 
modes are similar to those for inactive mode and off mode. For these 
two reasons, DOE presented an alternate approach that would be limited 
to specifying the hours for only inactive mode and off mode when 
calculating energy use associated with standby mode and off mode. Under 
this alternate approach, all of the non-active mode hours (8,620) would 
be allocated to inactive mode and off mode. 73 FR 74639, 74648 (Dec. 9, 
2008).
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    \12\ ``Inactive mode'' is defined as ``a standby mode other than 
delay start mode or cycle finished mode that facilitates the 
activation of active mode by remote switch (including remote 
control), internal sensor, or provides continuous status display.'' 
``Delay start mode'' is defined as ``a standby mode that facilitates 
the activation of active mode by timer.'' ``Cycle finished mode'' is 
defined as ``a standby mode that provides continuous status display 
following operation in active mode.''

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[[Page 22466]]

    In the TP NOPR, DOE proposed to establish the CEF \13\ for clothes 
dryer to integrate energy use in the standby mode and off mode with the 
energy use of the main functions of the product. The CEF would be 
defined as the clothes dryer test load weight in pounds divided by the 
sum of the per-cycle standby and off mode energy consumption and either 
the total per-cycle electric dryer energy consumption or the total per-
cycle gas dryer energy consumption expressed in kWh. 73 FR 74639, 74650 
(December 9, 2008).
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    \13\ DOE proposed to use the term ``Integrated Energy Factor'' 
(IEF) in the TP NOPR. 73 FR 74639, 74650 (Dec. 9, 2008). However, in 
the TP SNOPR, DOE proposed to revise the name of the metric to 
``Combined Energy Factor'' (CEF) to avoid confusion with an existing 
industry standard. 75 FR 37594, 37612 (June 29, 2010). DOE adopted 
CEF as the measure of clothes dryer energy efficiency in the TP 
Final Rule. 76 FR 972, 992 (January 6, 2011).
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    As discussed in chapter 5 of the preliminary TSD, for the 
preliminary analyses, DOE analyzed the cost-efficiency relationship for 
CEF using the alternative approach for this metric in the TP NOPR. That 
approach allocates all of the non-active mode hours into inactive mode 
and off mode energy use, and then integrates inactive mode and off mode 
energy use with active mode energy use.
    BSH commented that, in the formula to calculate the CEF in the 
clothes dryer test procedure, ``8620'' inactive/off mode hours should 
be replaced by (8720--per cycle duration (hours) x 416 clothes dryer 
annual cycles), where 8720 = 365 days x 24 hours per day. According to 
BSH, the standby mode is not valid during the active mode and, 
therefore, the duration of the active mode should be subtracted from 
the hours per year when calculating the standby energy consumption. 
(BSH, No. 23 at p. 5) DOE notes that the estimate for active mode hours 
presented in the TP NOPR was fixed based on the number of such hours 
specified in the existing test procedure (140 hours). 73 FR 74646-7 
(Dec. 9, 2008). DOE acknowledges that its estimate of the number of 
cycles per year has decreased. As discussed in the TP Final Rule, DOE 
notes that changes to the initial RMC, test load size, and specified 
water temperature for test load preparation may also affect cycle time 
and the number of active mode hours per year. DOE is not aware, 
however, of any data indicating that the number of active mode hours 
has changed and, if so, what a more accurate number might be. 
Therefore, DOE did not adopt amendments to the number of active mode 
hours in the TP Final Rule. 76 FR 972, 988 (January 6, 2011). For these 
reasons, DOE believes that using the 140 annual active mode hours, as 
specified in the existing test procedure, to determine the number of 
annual inactive mode and off mode hour of 8,620, as adopted in the TP 
Final Rule (76 FR 990), provides a more representative estimate of 
consumer use than the method suggested by BSH.
b. Automatic Cycle Termination
    In the framework document, DOE stated the clothes dryer test 
procedure may not adequately measure the benefits of automatic cycle 
termination, in which a sensor monitors either the exhaust air 
temperature or moisture in the drum to determine the length of the 
drying cycle. Currently, the test procedure provides a single field use 
factor for the enhanced performance of clothes dryers equipped with 
automatic termination. This single field use factor does not 
distinguish between the type of sensing control system (for example, 
temperature-sensing or moisture-sensing controls) and the accuracy of 
the control system. In chapter 2 of the preliminary TSD, DOE stated 
that it agrees that the effects of automatic cycle termination should 
be more accurately measured in its clothes dryer test procedure, and 
that this effect should properly account for any over- or under-drying. 
Thus, DOE noted it was considering clothes dryer test procedure 
amendments to address automatic cycle termination in the active mode 
test procedure rulemaking. In response, interested parties commented on 
the following topics relating to automatic cycle termination.
Definition of Automatic Termination Control
    The Joint Petitioners commented that DOE should revise section 1.11 
of 10 CFR 430 subpart B, appendix D to more clearly account for 
electronic controls by specifying that a preferred automatic 
termination control setting can also be indicated by a visual indicator 
(in addition to the mark or detent). The clarification would read ``* * 
* mark, visual indicator or detent which indicates a preferred * * *'' 
(Joint Petitioners, No. 33 at p. 25) As discussed in the TP Final Rule, 
DOE agreed that a clarification should be added to the definition of 
``automatic termination control.'' The clarification would be that a 
mark, detent, or other visual indicator which indicates a preferred 
automatic termination control setting must be present if the dryer is 
to be classified as having an automatic termination control. DOE so 
revised the definition in the TP Final Rule. 76 FR 972, 978 (January 6, 
2011).
Testing Procedures
    AHAM commented in response to the preliminary analyses that it 
continues to support the use of the automatic termination field use 
factor as currently specified by the DOE clothes dryer test procedure. 
AHAM stated that clothes dryers utilize different algorithms to 
determine when the drying cycle should end, and any evaluation of a 
different approach will need to be thoroughly investigated and should 
not be based on DOE test results from four sample units. AHAM proposed 
that DOE conduct a study that evaluates: (1) The accuracy of the DOE 
field use factor for today's products; and (2) the repeatability and 
reproducibility of a procedure where cycle end is determined by a 
moisture or temperature sensor. (AHAM, No. 25 at p. 13)
    Whirlpool commented that its testing showed significant improvement 
in the performance of sensors and automatic termination cycles when 
using systems that incorporate sensors that directly measure the 
moisture level of the clothes. Based on these test results, Whirlpool 
recommended that an additional automatic termination factor be included 
that would be equal to 1.01 to provide an appropriate field use factor 
for clothes dryers that utilize improved moisture sensor systems. 
(Whirlpool, No. 22 at p. 5)
    After the publication of the preliminary analyses, the Joint 
Petitioners submitted the Joint Petition, in which they commented that 
DOE should modify the clothes dryer test procedure to address the 
effectiveness of automatic termination controls (for example, moisture 
sensor and temperature sensor controls). (Joint Petitioners, No. 33 at 
p. 25) Pacific Gas & Electric (PG&E), Southern California Gas Company 
(SCGC), San Diego Gas and Electric Company (SDGE), and Southern 
California Edison (SCE) jointly (hereafter the ``California 
Utilities''). NRDC, and NEEP commented that the current DOE test 
procedure does not test the effectiveness of control sensors, which was 
found to vary significantly. (California Utilities, No. 31 at p. 3; 
NRDC, No. 26 at pp. 1, 2; NRDC, No. 30 at p. 29; NEEP, No. 27 at p. 3) 
NRDC, NEEP, and the California Utilities stated that the DOE test 
procedure is unrealistic and tests only the bulk-drying stage. In 
addition, by not testing the high-heat stage (which contributes very 
little to drying clothes) and instead applying a field use factor, the 
current test methods overestimate the efficiency of the clothes dryer. 
The current test methods also do not appropriately measure the energy 
use of clothes dryers

[[Page 22467]]

that use more effective controls to limit the energy consumption of the 
high-heat stage. (NRDC, No. 26 at pp. 1, 2; NRDC, No. 30 at p. 29; 
NEEP, No. 27 at p. 3; California Utilities, No. 31 at p. 3) NRDC added 
that the ECOS report stated that there is not much variation in 
efficiency of the bulk drying stage among different clothes dryers. 
However, there are considerable differences in the energy consumption 
of the high-heat stage, which is not measured by the DOE test 
procedure. (NRDC, No. 30 at p. 23) The ECOS report found that the 
difference between a standard clothes dryer and one that is effective 
at turning itself off when clothes are actually dry is about 0.76 kWh 
per load (5,000 kWh over typical lifetime). (NRDC, No. 26 at pp. 1, 2) 
The California Utilities also added that according to the ECOS report, 
clothes dryers, even with the same sensors, can use very different 
control algorithms that result in substantial variations between 
clothes dryers in the length of, and the amount of energy consumed 
during, the high-heat stage. (California Utilities, No. 31 at p. 3)
    NRDC commented that DOE should change its test procedure to measure 
at dryness levels less than 5-percent RMC with logging equipment that 
provides data enabling the lab to calculate when 5-percent RMC is 
reached and how long the clothes dryer continues to run thereafter. 
(NRDC, No. 26 at pp. 1, 2; NRDC, No. 30 at pp. 29-30) The California 
Utilities, ACEEE, and NPCC also commented that the test procedure 
should let the clothes dryer run until automatic shutoff, allowing the 
clothes dryer's sensors and termination controls to operate as 
intended, which would: (1) Be more representative of actual consumer 
behavior and give a better measure of expected energy use for 
consumers; (2) avoid the need for a field use factor to account for 
high-heat stage energy use and instead measure energy use directly; (3) 
appropriately measure the energy use of clothes dryers with better 
termination controls and encourage innovation in these controls; and 
(4) make the test procedure easier because the technician does not need 
to keep weighing the clothes. (California Utilities, No. 31 at pp. 3-4, 
12; ACEEE, No. 24 at pp. 1-2; NPCC, No. 32 at pp. 1-2)
    The California Utilities recommended the following amendments to 
section 3.3, ``Test cycle'' of the clothes dryer test procedure:
    <bullet> Set the clothes dryer for its ``Normal'' or ``Cotton'' 
cycle. If this in turn sets a temperature or dryness control, leave 
those controls at the default setting. If a temperature control must 
also be set, set it for ``High heat'' or ``Cotton.'' If a dryness 
control must also be set, set it for ``Normal dry'' or midway between 
``More dry'' and ``Less dry.''
    <bullet> Allow the clothes dryer to run until its cycle is 
complete. Promptly remove and weigh the test load. If it contains 5-
percent or less RMC, the test cycle is complete.
    <bullet> If the test load contains more than 5-percent RMC, return 
the load to the clothes dryer and reset the controls. In this case, the 
dryness control would then be set for ``Maximum dry'' and the cycle 
would be run to completion again and the test load weighed. Repeat if 
necessary until the RMC is 5 percent or less.
    <bullet> Total the amount of electricity (and gas if applicable) 
used during the initial default cycle and any subsequent cycles. 
(California Utilities, No. 31 at p. 4)
    The California Utilities also stated that section 4 of the DOE test 
procedure would be modified to remove all references to the field use 
factor. That factor is no longer needed because the test cycle now 
represents a typical consumer use cycle (including both the bulk-drying 
and high-heat stages), and would be omitted from all calculations. 
(California Utilities, No. 31 at p. 4) The California Utilities stated 
that the clothes dryers tested for the ECOS report using the default 
settings of the ``Normal'' or ``Cotton'' cycles all resulted in RMCs 
between 0 and 3 percent at the completion of the clothes dryer cycle. 
Therefore, it may be reasonable to assume that the additional cycles 
will rarely be used. The California Utilities stated that the 
additional cycles are included in their proposal to prevent a 
manufacturer from creating a default cycle that saves energy by not 
actually getting the clothes adequately dry. The California Utilities 
also stated that their proposed procedure represents the most likely 
consumer response to clothes that did not get dry the first time. 
(California Utilities, No. 31 at p. 4)
    The California Utilities also commented that, under their 
recommended test procedure changes for automatic cycle termination, 
there is a noticeable difference in energy consumption between the best 
and worst clothes dryers. For clothes dryers that respond effectively 
when the clothes have reached 5-percent RMC by discontinuing the 
application of heat and allowing the residual heat in the clothes to 
evaporate the remaining moisture, the energy measured under the new 
test cycle will be very similar to the energy measured under the 
current DOE test procedure, as the shutoff point will occur near 5-
percent RMC under either test. The California Utilities stated that its 
proposed test procedure would more accurately measure the real 
contribution of automatic termination controls and mimic consumer 
behavior. As a result there would be no need to use a field use factor 
for clothes dryers with automatic termination controls. (California 
Utilities, No. 31 at p. 4)
    BSH commented that DOE should test clothes dryers using the 
automatically controlled programs including the cool-down phase. 
According to BSH, timer dryers waste energy because consumers will set 
a longer drying time than required to ensure the desired drying 
results, resulting in over-drying. BSH commented that a change in the 
test procedure to measure the real final moisture content for 
automatically controlled dryers will show the differences between 
competitive clothes dryers. BSH also commented that the cool-down phase 
is, in automatically controlled dryers, an essential part of the 
process to use the energy in the most efficient way, and that the heat 
accumulated in the appliance and the laundry may be used to finish 
drying the laundry and increase the efficiency of the clothes dryer. 
(BSH, No. 23 at pp. 4-5)
    NRDC commented that the ECOS report states that newer clothes 
dryers are capable of moisture-sensing drying, but that feature can be 
(and likely routinely is being) overridden by consumers who continue to 
operate clothes dryers on a time basis as they always have. NRDC added 
that the ECOS report states that DOE should require manufacturers to 
incorporate moisture sensing into the timed cycle to ensure that the 
heating element shuts off and that airflow is greatly reduced once the 
clothes are dry. (NRDC, No. 30 at p. 29)
    As discussed above in this section, DOE proposed amendments to its 
clothes dryer test procedure in the TP SNOPR to more accurately account 
for automatic cycle termination. However, as discussed in the TP Final 
Rule, DOE conducted testing on a sample of representative clothes 
dryers according to the amendments to the test procedure for automatic 
cycle termination proposed in the TP SNOPR. The tests consisted of 
running the clothes dryer on a ``normal'' automatic termination setting 
and stopping the clothes dryer when the heater switches off for the 
final time (immediately before the cool-down period begins). Three 
identical tests were conducted for each clothes dryer unit, and the 
results were averaged. DOE first noted that not all of the clothes 
dryers offered a ``normal'' cycle setting. For those clothes dryers,

[[Page 22468]]

DOE chose the cycle that would most closely match a ``normal'' cycle. 
The results of this testing, presented below in Table III.1, showed 
that the tested clothes dryers had a measured EF of between 12.4 
percent and 38.8 percent lower than the EF measured according to the 
current DOE clothes dryer test procedure. DOE also noted that all of 
tested units dried the test load to final RMCs well below the target 
RMC of 5 percent, ranging from 0.4 percent to 1.4 percent RMC, with an 
average of 0.8 percent. DOE also noted that even if the field use 
factor for a timer dryer is applied to the measured EF for a clothes 
dryer equipped with automatic cycle termination, using the current DOE 
clothes dryer test procedure (to add the fixed estimate of over-drying 
energy consumption associated with time termination control dryers), 
this EF would still be less than the EF measured under the automatic 
cycle termination test procedure amendments proposed in the TP SNOPR. 
76 FR 972, 999 (January 6, 2011).

                                            Table III.1--DOE Clothes Dryer Automatic Cycle Termination Tests
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Current DOE    Proposed automatic cycle  termination test procedure
                                                                                   test procedure  -----------------------------------------------------
                                                                Current DOE test     w/modified
                           Test unit                            procedure  EF lb/     field use
                                                                       kWh         factor * EF lb/      EF lb/kWh         % Change         Final RMC %
                                                                                         kWh
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vented Electric Standard:
    Unit 3....................................................              3.20              2.82              2.59             -19.1               1.0
    Unit 4....................................................              3.28              2.89              2.59             -21.2               0.6
Vented Gas:
    Unit 8....................................................              2.83              2.50              2.42             -14.5               0.4
    Unit 9....................................................              2.85              2.51              2.38             -16.3               0.9
    Unit 11...................................................              2.98              2.63              2.40             -19.5               0.9
Vented Electric Compact 240V:
    Unit 12...................................................              3.19              2.81              2.64             -17.3               0.5
    Unit 13...................................................              2.93              2.59              2.27             -22.7               1.4
Vented Electric Compact 120V:
    Unit 14...................................................              3.23              2.85              1.98             -38.8               0.7
Ventless Electric Compact 240V:
    Unit 15...................................................              2.37              2.09              2.07             -12.4               1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Field use factor changed from 1.04 for clothes dryers with automatic termination to 1.18 for timer dryers.

    In the TP Final Rule, DOE stated that these test results showed 
significantly higher measured energy use for clothes dryers tested 
under the DOE test procedure with the proposed automatic cycle 
termination amendments. DOE evaluated possible reasons for this 
difference. DOE concluded that given the test load specified in the 
test procedure,\14\ the proposed automatic cycle termination control 
procedures may not adequately measure clothes dryer performance. As 
discussed in the previous paragraph, DOE believes that, although 
automatic termination control dryers may be measured as having a lower 
efficiency than a comparable dryer with only time termination control 
if tested according to the proposed test procedure, automatic 
termination control dryers may in fact be drying the clothing to 
approximately 5-percent RMC in real world use. DOE believes that 
automatic termination control dryers reduce energy consumption (by 
reducing over-drying) compared to timer dryers based on analysis of the 
AHAM field use survey and analysis of field test data conducted by 
NIST. 46 FR 27324 (May 19, 1981).
---------------------------------------------------------------------------

    \14\ The DOE clothes dryer test load is comprised of 22 in x 34 
in pieces of 50/50 cotton/polyester-blend cloth.
---------------------------------------------------------------------------

    For these reasons, DOE stated in the TP Final Rule that it believes 
that the test procedure amendments for automatic cycle termination 
proposed in the TP SNOPR do not adequately measure the energy 
consumption of clothes dryers equipped with such systems. As a result, 
DOE did not adopt the amendments for automatic cycle termination 
proposed in the TP SNOPR. 76 FR 972, 1000 (January 6, 2011). DOE noted 
that if data is made available to develop a test procedure that 
accurately measures the energy consumption of clothes dryers equipped 
with automatic termination controls, DOE may consider revised 
amendments in a future rulemaking.
    With regard to NRDC's comment that DOE should require manufacturers 
to incorporate moisture sensing into the timed cycle, DOE notes that 
EPCA defines an energy conservation standard as either a performance 
standard or, for certain products including clothes dryers, a design 
requirement. (42 U.S.C. 6291(6)) EPCA also specifies that DOE may set 
more than one energy conservation standard for products that serve more 
than one major function by setting one energy conservation standard for 
each major function. (42 U.S.C. 6295(o)(5)) DOE notes the energy 
conservation standards for clothes dryers set forth in this final rule 
are based on drying performance and that an additional precriptive 
standard to require manufacturers to incorporate moisture sensing into 
the timed dry cycle would address the same major function of the drying 
performance. For these reasons, DOE is not adopting an additional 
prescriptive requirement for clothes dryers.
    DOE believes that the alternate test procedure for automatic cycle 
termination recommended by the California Utilities is similar to the 
test cycle proposed by DOE in the TP SNOPR. DOE notes that the 
California Utilities' recommendations would clarify the settings to be 
used in cases where a ``Normal'' cycle or ``High heat'' temperature 
setting was not clearly specified. DOE does not believe that this added 
clarification would resolve the issues with the proposed automatic 
cycle termination test procedure identified in this section because the 
setting used during DOE testing would be the same under the California 
Utilities' recommendation. In addition, DOE notes that the California 
Utilties' recommendation to specify the ``Normal dry'' setting is 
generally the default setting under the ``Normal'' cycle. DOE also 
notes that the ``Normal dry'' setting was used during its testing, and 
as a result this clarification would not resolve the issues associated 
with the

[[Page 22469]]

automatic cycle termination test procedure identified above. Finally, 
DOE notes the California Utilities' recommendation that if the test 
load contains more than 5-percent RMC, the test load would be placed 
back in the clothes dryer and the cycle would be run again using the 
``Maximum dry'' setting is similar to the proposed amendments in the TP 
SNOPR. However, the proposed amendments in the TP SNOPR would require 
the test be re-run from the start using the specified initial RMC and 
the ``Maximum dry'' setting. The California Utilities' recommendations 
would require that the test load with the RMC at the end of the first 
test cycle be re-run on a cycle with the ``Maximum dry'' setting and 
the energy would then be accumulated. DOE believes that this 
recommendation would not resolve the issue of the significant over-
drying observed during testing because it addresses cases only in which 
the test load under-dries. For these reasons, DOE is not adopting the 
alternate test procedure for automatic cycle termination recommended by 
the California Utilities. If DOE considers adopting test procedure 
amendments for automatic cycle termination in a future rulemaking, it 
may consider these recommendations.
Cycle Settings
    NRDC commented that the testing described in the ECOS report showed 
that automatic termination cycles using lower heat settings or lower 
dryness level reduce energy consumption and increase efficiency because 
less energy is spent heating air, cloth, and metal. NRDC commented that 
the ECOS report summarized testing results for one clothes dryer that 
showed that the difference in energy consumption between the highest 
and lowest heat settings was 13 percent and that the drying time 
increased (from 35 to 49 minutes), but very similar final RMCs were 
achieved. (NRDC, No. 30 at p. 22) NRDC commented that the ECOS report 
found that a ``normal dry'' setting removed practically all of the 
water (producing a final RMC of less than 1 percent), making the ``more 
dry'' setting appear to be unnecessary. The ECOS report stated that the 
``normal dry'' used about 12 percent less energy than the ``more dry'' 
setting, and the ``less dry'' setting saved another 18 percent, but did 
leave residual moisture in the clothes. NRDC commented that the ECOS 
report added that in all but the highest humidity climates, the ``less 
dry'' setting may be fully adequate and would give considerable energy 
savings. Id. NRDC commented that DOE should measure the efficiency of 
different clothes dryer settings, in particular the ``more dry'' 
setting, which the ECOS report stated may not be warranted because the 
``normal dry'' settings remove effectively all of the moisture. (NRDC, 
No. 26 at pp. 1, 3)
    As discussed in the previous section, DOE did not adopt amendments 
to more accurately account for automatic cycle termination in the TP 
Final Rule. Therefore DOE did not consider amendments to the clothes 
dryer test procedure to measure the efficiency of different clothes 
dryer automatic cycle termination temperature and dryness level 
settings.
Effect of Automatic Cycle Termination Test Procedure on Measured Energy 
Factor
    The California Utilities stated that under their proposed test 
procedure, the 4 percent field use factor would not be necessary; 
therefore removing it would reduce apparent (reported) energy use by 4 
percent. Instead of EFs from 3.01 to 3.4, these clothes dryers would be 
rated at EF from 3.13 to 3.54. According to the California Utilities, 
these higher ratings are appropriate because these clothes dryers stop 
quickly and save the consumer energy under real world operating 
conditions. (California Utilities, No. 31 at pp. 4-5) NRDC commented 
that the ECOS report summarized testing results that showed that some 
electronically controlled dryers could detect the clothes were already 
dry and shut down after 5 to 15 minutes, while electromechanically 
controlled dryers needed up to 50 minutes before shutting down. (NRDC, 
No. 30 at pp. 29-30) The California Utilities also noted that one 
clothes dryer tested in the ECOS report ran for an additional 30 
minutes after reaching 5 percent RMC because of an inefficient control 
algorithm and would test with an EF of about 2.51 under their proposed 
test procedure. According to the California Utilities, this lower 
rating would be appropriate, because in real practice this dryer would 
significantly increase clothes dryer energy use. (California Utilities, 
No. 31 at p. 5) The California Utilities commented that a real savings 
opportunity exists simply through an improved test procedure (as they 
proposed), which will better characterize the real-world energy 
performance of dryers. The California Utilities added that dryers that 
meet the baseline EF under the current test procedure but have poor 
automatic termination controls will not meet the same EF under a 
revised test. Thus, those dryers will have to improve to meet the 
baseline EF of 3.01. The California Utilities added that, if tested 
using their proposed test procedure, the least efficient clothes dryers 
in the sample of clothes dryers in the ECOS report will need to 
increase their efficiency by 20 percent or more to meet the current 
energy conservation standard. (California Utilities, No. 31 at p. 5)
    As discussed in the Test Procedures section, DOE did not adopt the 
amendments to the clothes dryer test procedure to better account for 
automatic cycle termination that were proposed in the TP SNOPR. As a 
result, DOE is not considering any revisions to the energy conservation 
standards based on the proposed amendments for automatic cycle 
termination in the TP SNOPR. If DOE considers potential amendments for 
automatic cycle termination in a future rulemaking, it would also 
consider any necessary revisions to the energy conservation standards. 
In addition, as discussed above, DOE noted that the alternate test 
procedure for automatic cycle termination recommended by the California 
Utilities is similar to the test cycle proposed by DOE in the TP SNOPR. 
As a result, DOE does not believe the measured EF would be different 
between the proposed amendments in the TP SNOPR and the California 
Utilities' recommendations except for cases in which the test load is 
not dried to below 5-percent RMC. In this case the California 
Utilities' recommendations would require that the measured energy 
consumption from any additional test cycles using the ``Maximum dry'' 
setting be added to the energy consumption from the first test cycle, 
whereas the measured efficiency under the proposed amendments in the TP 
SNOPR would be based on only the re-run test cycle using the ``Maximum 
dry'' setting. However, for the reasons discussed above, DOE believes 
that the California Utilities' recommendations would not resolve the 
issue of the significant over-drying observed during DOE testing. As a 
result, DOE is not adopting the alternate test procedure for automatic 
cycle termination recommended by the California Utilities and therefore 
is not considering any revisions to the energy conservation standards 
based on these recommendations.
c. Ventless Clothes Dryers
    For the reasons discussed in section IV.A.3.a of this direct final 
rule, DOE defines two new product classes in this rulemaking for 
ventless clothes dryers. The clothes dryer test procedure at 10 CFR 
part 430, subpart B, appendix D is unable to test ventless clothes 
dryers, which include condensing clothes

[[Page 22470]]

dryers as well as combination washer/dryers. Ventless clothes dryers do 
not vent exhaust air to the outside as a conventional, vented dryer 
does. Instead, they typically use ambient air in a heat exchanger to 
cool the hot, humid air inside the appliance, thereby condensing out 
the moisture. Alternatively, cold water can be used in the heat 
exchanger to condense the moisture from the air in the drum. In either 
case, the dry air exiting the drum is reheated and recirculated in a 
closed loop. Thus, rather than venting moisture-laden exhaust air 
outside, ventless clothes dryers produce a wastewater stream that can 
be either collected in an included water container or discharged down 
the household drain. The process of condensing out the moisture in the 
recirculated air results in higher energy consumption than a 
conventional dryer, and it can significantly increase the ambient room 
temperature.
    To address the potential limitation of the clothes dryer test 
procedure for ventless dryers, DOE proposed an alternate test procedure 
for ventless dryers in the TP SNOPR and adopted this procedure in the 
TP Final Rule. [75 FR 37594, 37620 (June 29, 2010); 76 FR 972, 976-977 
(January 6, 2011)] The alternate test procedure consists of adding 
separate definitions for a ``conventional clothes dryer'' (vented) and 
a ``ventless clothes dryer.'' Further, the alternate test procedure 
qualifies the requirement for an exhaust simulator so that it would 
only apply to conventional clothes dryers. DOE also adopted provisions 
to clarify the testing procedures for ventless clothes dryers, 
including requirements for clothes dryers equipped with a condensation 
box, requirements for the condenser heat exchanger, and specifications 
for ventless clothes dryer preconditioning. DOE also adopted 
clarifications in the TP Final Rule to provide explicit instructions as 
to the procedure for re-running the test cycle when the condensation 
box is full. DOE also revised the requirement for ventless clothes 
dryer preconditioning to remove the maximum time limit for achieving a 
steady-state temperature. DOE also included additional editorial 
clarifications to the testing procedures for ventless clothes dryers. 
76 FR 972, 976-977 (January 6, 2011).
    In chapter 2 of the preliminary TSD, prior to adoption of the TP 
Final Rule, DOE stated that it was considering amendments to its 
clothes dryer test procedure to allow for the measurement of the energy 
efficiency of ventless clothes dryers in its active mode test procedure 
rulemaking.
    The Joint Petitioners commented that DOE should create a ventless 
clothes dryer (including ventless combination washer/dryer) test 
procedure to inform a baseline energy consumption level for this new 
product category. (Joint Petitioners, No. 33 at p. 25)
    AHAM suggested that DOE incorporate language from the alternate 
test procedure presented in the LG's Petition for Waiver and Denial of 
the Application for Interim Waiver (71 FR 49437, 49439 (Aug. 23, 
2006)), with the additional changes that the term ``condensing clothes 
dryer'' be changed to ``ventless clothes dryer'' and ``HLD-1'' be 
changed to ``AHAM HLD-1.'' AHAM stated that DOE should validate the 
proposed test procedure approach and the resultant energy consumption 
values through a viable statistical method. AHAM stated that it is not 
in a position to provide data on ventless products due to the small 
number of products in the proposed ``compact ventless'' product class. 
According to AHAM, ventless clothes dryers, when tested using the 
dryer-centric approach presented by DOE in the LG Petition for Waiver, 
will appear to have higher energy consumption (kWh per year) than 
conventional vented clothes dryers. (AHAM, No. 25 at p. 4)
    Whirlpool commented that its proposal, which provides amendments to 
the DOE test procedure to include methods for testing of ventless 
clothes dryers, improves upon the DOE proposal for the ventless clothes 
dryer test procedure because it takes into account technical 
differences between vented and ventless clothes dryers.\15\ (Whirlpool, 
No. 13 at pp. 1-22) Whirlpool indicated that their proposal was a draft 
only and they would be willing to work with DOE to make revisions or 
enhancements to this proposal. (Whirlpool, No. 22 at p. 1)
---------------------------------------------------------------------------

    \15\ Whirlpool's proposed amendments for ventless clothes dryers 
included: (1) Definitions of ``conventional'' and ``condensing'' 
clothes dryers; (2) installation conditions; (3) requirements for 
clothes dryer preconditioning; (4) requirements for condensation 
boxes and condenser units; and (5) requirements for test cycle 
measurements.
---------------------------------------------------------------------------

    In the TP Final Rule, DOE adopted testing methods for the testing 
of ventless clothes dryers based on the alternate test procedure 
proposed in the TP SNOPR; the amendments suggested by Whirlpool; and 
additional language from the internationally accepted test standards 
Australia/New Zealand (AS/NZS) Standard 2442, ``Performance of 
household electrical appliances--Rotary clothes dryers'' and European 
Standard EN 61121, ``Tumble dryers for household use--Methods for 
measuring the performance,'' Edition 3 2005 (EN Standard 61121). 76 FR 
972, 976 (January 6, 2011). Also noted in the TP Final Rule, DOE used 
the term ``ventless'' instead of ``condensing,'' as suggested by AHAM, 
to reflect the actual consumer utility (that is, no external vent 
required) because it is possible that vented dryers that also condense 
may become available on the market. Id. DOE also conducted testing for 
the TP Final Rule to evaluate the repeatability of the amended test 
procedure for ventless dryers. As detailed in the TP Final Rule, 
ventless electric compact 240V dryers and ventless electric combination 
washer/dryers showed less than 1 percent variation and less than 3.5 
percent variation in EF from test to test, respectively. DOE stated in 
the TP Final Rule that it believes that the amendments for ventless 
clothes dryers produce repeatable measurements of EF. 76 FR 972, 1009 
(January 6, 2011). DOE also notes that the measured EF values for 
ventless electric compact (240V) dryers and ventless electric 
combination washer/dryers tested according to the DOE test procedure at 
appendix D, using only the amendments for ventless clothes dryers (2.37 
and 2.02, respectively), are in close agreement with the baseline 
values proposed in the preliminary analyses shown below in Table IV.15 
and Table IV.16. Therefore, DOE did not revise the baseline EF levels 
for the ventless clothes dryer product classes.
    In response to AHAM's comment that ``HLD-1'' should be changed to 
``AHAM HLD-1,'' DOE has adopted this editorial change in the TP Final 
Rule. 76 FR 972, 1032 (January 6, 2011).
    BSH commented that DOE should consider the condensation rate for 
ventless clothes dryers. BSH added that the condensation rate 
efficiency is an important indicator to measure. (BSH, No. 23 at p. 4) 
DOE notes that EN Standard 61121 provides for a measurement of the 
condensation rate efficiency. However, this measurement is not used in 
the calculation of energy use, which considers only the energy required 
to dry the load to a specified final RMC. However, DOE also notes that 
the ability of a ventless clothes dryer to condense moisture directly 
affects the energy use per-cycle. For example, if a ventless clothes 
dryer has a lower condensation efficiency, the air recirculated into 
the drum would contain more moisture and thus would be able to remove 
less moisture from the test load. As a result, the energy use of such a 
ventless clothes dryer would be greater than a ventless clothes dryer 
with a higher condensation efficiency because it would need to run for 
a

[[Page 22471]]

longer time to condense the same amount of moisture from the test load. 
Therefore, DOE believes that the condensation efficiency of a ventless 
clothes dryer is sufficiently accounted for in the measurement of the 
per-cycle energy consumption. For these reasons, DOE is not providing 
for a measurement of condensation efficiency of a clothes dryer.
    NRDC questioned whether ventless electric combination washer/dryers 
are going to be tested in drying mode only or as a unit with washing 
and drying capability. NRDC stated that, according to the ECOS report, 
there is a potential for energy savings if manufacturers are allowed to 
test units together that work together, because it is more efficient to 
manually remove the water than to dry it. NRDC supported the ECOS 
report suggestion that DOE consider a testing and labeling program 
based on the total energy use, cost, and CO<INF>2</INF> emissions for 
washing and drying a standard load of clothes. According to the ECOS 
report submitted by NRDC, highly efficient clothes washers greatly 
decrease the amount of work that a clothes dryer needs to do, but that 
a clothes dryer is less efficient when drying loads with lower initial 
RMCs. (NRDC, Public Meeting Transcript, No. 21.4 at p. 22; NRDC, No. 30 
at pp. 31-32) Whirlpool commented that the development of a test 
procedure for ventless electric combination washer/dryers is not worth 
the time and resources necessary to develop it and suggested that DOE 
not proceed with such an effort. (Whirlpool, No. 22 at p. 1) DOE is not 
aware of repeatable and representative test methodologies to accurately 
measure the efficiency of a combined wash-dry cycle. DOE notes that the 
clothes washer test procedure requires the measurement of multiple load 
sizes (minimum, maximum, and average values) as well as multiple cycle 
settings and water temperatures, but the clothes dryer test procedure 
requires only a single test load size with a single timed dry cycle 
with the highest temperature setting. DOE is not aware of how the test 
load sizes and cycle settings would be aligned to produce accurate and 
representative test results. DOE also notes that the maximum load size 
for the washing portion of the cycle (sized according to the capacity 
of the drum), may be larger than the load size recommended by 
manufacturers for the drying portion of the cycle, and thus it is not 
clear what size test load should be specified for a combined cycle. For 
these reasons, DOE is not adopting a test procedure to measure a full 
combined wash-dry cycle. DOE also notes that the efficiency of the 
washer portion of a combination washer/dryer is covered under the 
minimum energy conservation standards for clothes washers, and that the 
TP Final Rule amended the clothes dryer test procedure to include 
methods for measuring the energy use of the drying portion of a 
combination washer/dryer.
d. Consumer Usage Habits
Annual Cycles
    DOE published a final rule on August 27, 1997, amending the DOE 
clothes washer test procedure to lower the annual clothes washer use 
cycle value from 416 to 392 cycles per year, a value DOE determined to 
be more representative of current usage patterns. 62 FR 45484. Further, 
the revised DOE clothes washer test procedure assumes that 84 percent 
of all clothes washer loads are dried in clothes dryers. Thus, the 
annual usage pattern for clothes dryers would be 329 cycles per year. 
In addition, in the recently proposed amendments to the clothes washer 
test procedure, DOE proposed to amend the number of cycles per year to 
295. 75 FR 57556, 57564 (Sept. 21, 2010). In contrast, the current DOE 
residential clothes dryer test procedure in appendix D assumes an 
average annual clothes dryer use of 416 cycles per year. (10 CFR 
430.23(d)(1))
    DOE stated in chapter 2 of the preliminary TSD that it was 
reviewing available data on the number of annual clothes dryer cycles, 
and would consider amendments to its test procedure to accurately 
reflect the number of annual clothes dryer cycles for the clothes dryer 
tests.
    The Joint Petitioners and ACEEE commented that DOE should update 
the number of clothes dryer cycles per year based on the best available 
data (ideally based on a nationally representative sample). (Joint 
Petitioners, No. 33 at p. 25; ACEEE, No. 24 at p. 1) The California 
Utilities supported reducing the clothes dryer cycles per year from 416 
to 329 to reflect new Energy Information Administration (EIA)'s 
``Residential Energy Consumption Survey'' (RECS) survey data on 
household use. (California Utilities, No. 31 at pp. 2-3, 12) According 
to AHAM, a recent Proctor & Gamble (P&G) consumer survey showed that 
the average consumer dries 5.35 loads per week, or 278 load per year, 
which is essentially identical to the value estimated by RECS (279 
cycles per year), providing good verification for the RECS approach. 
AHAM commented that DOE should ensure that any value used in the 
economic portion of the rulemaking analysis (that is, cycles per year) 
be used in the engineering analysis, and that the test procedure be 
modified to reflect this value. (AHAM, No. 25 at p. 9)
    As discussed in the TP Final Rule, DOE amended its clothes dryer 
test procedure to change the number of clothes dryer cycles per year 
from 416 to 283 based on data from the 2005 RECS. 76 FR 972, 977 
(January 6, 2011). DOE notes that this value is in close agreement with 
the estimates provided in the P&G data (278 cycles per year). DOE also 
noted in the TP SNOPR that data from the 2004 California Statewide 
Residential Appliance Saturation Study (RASS), which surveyed appliance 
product usage patterns, including clothes dryers, indicated an average 
of 4.69 loads per week, or approximately 244 loads per year, which is 
in agreement with the downward trend of the number of clothes dryer 
cycles per year. Because the 2004 California Statewide RASS provides 
only a limited dataset, however, DOE stated in the TP SNOPR that it did 
not intend to rely only on this data to determine an appropriate number 
of annual use cycles for the clothes dryer test procedure. 75 FR 37594, 
37625 (June 29, 2010). DOE believes that these data sources provide 
sufficient justification for the revised value of 283 cycles per year 
using the RECS-based approach.
Cycle Time
    Edison Electric Institute (EEI) commented that DOE's assumption of 
8,620 standby hours leaves 140 active mode hours which would correspond 
to 20 minutes per drying cycle (if the assumption is that there are 416 
dryer cycles per year). EEI questioned whether this was accurate and 
stated that DOE should review those numbers. (EEI, Public Meeting 
Transcript, No. 21.4, at p. 49) DOE notes that the TP Final Rule amends 
the DOE clothes dryer test procedure to lower the initial RMC of the 
clothes load from 70 percent to 57.5 percent which will result in a 
decreased cycle time. DOE also notes that the amendments in the TP 
Final Rule to increase the test load size for standard size dryers from 
7 lb. to 8.45 lb. as well as changing the water temperature for test 
load preparation from 100 [deg]F to 60 [deg]F will result in an 
increased cycle time. 76 FR 972, 988 (January 6, 2011). The TP Final 
Rule also amended the clothes dryer test procedure to change the number 
of cycles per year from 416 to 283. 76 FR 977. Based on the amendment 
to the number of annual use cycles, DOE notes that the cycle length 
would be approximately 30 minutes (140 annual active mode hours/283 
active mode cycles per year). DOE is

[[Page 22472]]

unaware, however, of consumer usage data indicating that the number of 
active mode hours per year has changed. For these reasons, DOE did not 
change the number of clothes dryer active mode hours in the TP Final 
Rule.
Initial RMC
    The DOE clothes dryer test procedure in appendix D specifies that 
the clothes load have an initial RMC of 70 <plus-minus> 3.5 percent. 
DOE stated in the preliminary TSD that a review of residential clothes 
washer models in the California Energy Commission (CEC) product 
database suggests that the average RMC is less than the nominal 70 
percent that is currently provided for in the DOE clothes dryer test 
procedure. Therefore, DOE stated it was considering amendments to the 
clothes dryer test procedure to address RMC.
    The Joint Petitioners and ACEEE commented that DOE should update 
the initial RMC based on the best available data (ideally based on a 
nationally representative sample). (Joint Petitioners, No. 33 at p. 25; 
ACEEE, No. 24 at p. 1) NRDC commented that DOE's initial RMC 
assumptions do not reflect today's washing machines and should be 
revised to better reflect current washer technology. (NRDC, No. 26 at 
pp. 2, 4) NRDC commented that the ECOS report summarized test results 
for a single clothes washer which showed that the RMCs after the wash 
cycle is finished are 70-percent RMC for cotton bath towels and 40-
percent RMC for the DOE 50/50 cotton/polyester test cloths. (NRDC, No. 
30 at pp. 30-31) NRDC also stated that the energy consumption of a 
clothes dryer decreases when the initial RMC is lower, but not in 
direct proportion to the lowered water content because energy is still 
used to heat and move the air, cloth and metal. (NRDC, No. 26 at pp. 2, 
4) The California Utilities and the NPCC both supported reducing the 
initial RMC from the current 70 percent to a value nearer to 56 
percent, based on data submitted by AHAM, recognizing that today's 
washers have faster spin speeds and typically leave less water in the 
clothes. (California Utilities, No. 31 at pp. 2, 12; NPCC, No. 32 at p. 
2) However, NPCC also commented that even an initial RMC of 56 percent 
may not reflect the RMC produced by higher efficiency clothes washers 
that may be required as a result of the current DOE rulemaking for 
those products. NPCC commented that the average RMC for clothes washers 
in the July 2008 CEC appliance product directory was only 46 percent 
(as presented by DOE), which is well below its proposed revised value. 
(NPCC, No. 32 at p. 2)
    AHAM and Whirlpool supported using the industry shipment-weighted 
average residential clothes washer RMC of 47 percent derived from data 
provided by AHAM. They commented that DOE should use the 47-percent RMC 
in both the engineering and economic analyses; modify the test 
procedure by changing the RMC from 70 percent to 47 percent; and modify 
the baseline energy factor to reflect the change in the test procedure. 
Whirlpool added that failure to do so will result in overstating 
clothes dryer energy use, thus rendering all payback and LCC 
calculations erroneous. (AHAM, No. 25 at p. 10; Whirlpool, No. 22 at 
pp. 2-3) AHAM also stated that data collected by industry showed a 22-
percent increase in EF when the initial RMC is changed to 56 percent. 
AHAM commented that they expect EF will increase further as RMC is 
reduced to 47 percent, but that the relationship is not expected to be 
linear. (AHAM No. 25 at p. 10)
    BSH also commented that it supports reducing the initial RMC for 
testing purposes, and added that the DOE test procedure should be 
defined before any energy conservation standard levels are established. 
(BSH, No. 23 at p. 6) BSH also commented that it should be clarified 
which energy consumption results from each change in the test procedure 
before a suitable classification can be done and added that a round 
robin test may be helpful to estimate the energy levels. (BSH, No. 23 
at p. 6)
    In the TP SNOPR, DOE proposed to change the initial RMC from 70 
percent to 47 percent based on shipment-weighted clothes washer RMC 
data provided by AHAM. 75 FR 37594, 37626-31 (June 29, 2010). As 
discussed in the TP Final Rule, DOE received comments in response to 
the TP SNOPR that the shipment-weighted average RMC value in the AHAM 
data was based on the clothes washer RMC, which uses an RMC correction 
factor to normalize testing results from different lots of test cloth, 
but the DOE clothes dryer test procedure should instead use the 
uncorrected RMC value. DOE determined that an initial clothes dryer RMC 
of 57.5 percent more accurately represents the moisture content of 
current laundry loads after a wash cycle for the purposes of clothes 
dryer testing, derived from the 47-percent shipment-weighted RMC for 
clothes washers (that was based on analysis of data provided by AHAM) 
without the application of the RMC correction factor specified in the 
DOE clothes washer test procedure, as discussed above in this 
paragraph. DOE validated this estimate using clothes washer uncorrected 
RMC data from testing of a limited sample of representative clothes 
washers for the DOE clothes washer energy conservation standards 
rulemaking. As a result, the TP Final Rule amended the DOE clothes 
dryer test procedure to adopt this value for the initial RMC. 76 FR 
972, 977 (January 6, 2011). As discussed in section IV.C.2.a, DOE 
conducted testing for the TP Final Rule in order to analyze how the 
amendments to the test procedure, including the change to the initial 
RMC, would affect the measured efficiency of clothes dryers.
Load Size
    Currently the DOE test procedure for clothes dryers requires a 7.00 
lb. <plus-minus> .07 lb. test load for standard-size dryers and a 3.00 
lb. <plus-minus> .03 lb. test load for compact-size dryers. (10 CFR 
part 430, subpart B, appendix D, section 2.7) DOE stated in chapter 2 
of the preliminary TSD that it was reviewing available data to 
determine the current representative clothes dryer load size, and would 
consider amendments to its test procedure to accurately reflect the 
current clothes dryer test load size for the clothes dryer tests.
    The Joint Petitioners and ACEEE commented that DOE should update 
the size of the clothes dryer test load based on the best available 
data (ideally based on a nationally representative sample). (Joint 
Petitioners, No. 33 at p. 25; ACEEE, No. 24 at p. 1) The California 
Utilities and NPCC both supported increasing the test load size from 7 
lb. to 8.3 lb., or another appropriate value, commenting that 8.3 lb. 
is more typical of the size of loads in today's larger clothes dryers, 
as based on DOE's distribution of tub sizes from models in the CEC 
database. (California Utilities, No. 31 at p. 2; NPCC, No. 32 at p. 2) 
NRDC also commented that DOE should consider modifying the clothes 
dryer size criteria, stating that test load sizes for clothes dryers do 
not correlate to the test load sizes for washers and likely do not 
reflect real life load size. According to NRDC, current clothes dryer 
size classes are likely inaccurate given that today's clothes dryers 
can comfortably hold loads of 10 to 17 lb., with more 7 to 8 cubic foot 
(ft\3\) models now on the market than models smaller than 7 ft\3\. NRDC 
commented that DOE should reevaluate its clothes dryer size criteria 
and test load size to better reflect the clothes dryers available on 
the market today. (NRDC, No. 26 at pp. 2, 4; NRDC, No. 30 at p. 30)
    AHAM commented that it prefers that DOE utilize industry values for 
data such as clothes dryer load size. AHAM stated that the shipment-
weighted

[[Page 22473]]

residential clothes washer drum volume for standard-size products in 
2008 was 3.24 ft\3\, which corresponds to an average clothes washer 
load size of 8.15 lb. AHAM also stated that for compact clothes 
washers, the shipment-weighted average drum volume was 1.5 ft\3\, which 
corresponds to an average load size of 4.70 lb. AHAM added that because 
compact products are a separate product class, they should be treated 
as such in the analysis. AHAM commented that it supports the use of two 
separate load sizes (8.15 lb. for standard-size and 4.70 lb. for 
compact-size products), if the modified load size is used in both the 
engineering and economic analyses, and if the test procedure is 
modified to be consistent with this analysis and the baseline EF is 
modified to reflect the change in load size. (AHAM, No. 25 at pp. 10-
11)
    In the TP Final Rule, DOE amended the clothes dryer test procedure 
to change the load size from 7.00 lb <plus-minus> .07 lb to 8.45 lb 
<plus-minus> .085 lb based on the historical trends of the shipment-
weighted average tub volume for residential clothes washers from 1981 
to 2008 and the corresponding percentage increase in clothes washer 
load sizes (as specified in the load size table 5.1 in the DOE clothes 
washer test procedure at 10 CFR part 430, subpart B, appendix J1), 
which is assumed to proportionally impact clothes dryer load size. 76 
FR 972, 977 (January 6, 2011). DOE believes that this estimate using 
the percentage increase in load size based on trends in clothes washer 
tub volumes would produce a more representative value than simply using 
the nominal load size value in the clothes washer test procedure, as 
suggested by AHAM. DOE does not have any consumer usage data indicating 
that consumers always machine dry the same size load from the wash 
cycle such that the average clothes washer load size can be directly 
applied to the clothes dryer test procedure, as suggested by AHAM. As 
discussed in section IV.C.2.a, DOE conducted testing for the TP Final 
Rule in order to analyze how the amendments to the test procedure, 
including the change to the load size, would affect the measured 
efficiency.
    DOE stated in the TP Final Rule that it believes that most compact 
clothes dryers are used in conjunction with compact-size clothes 
washers, and DOE is not aware of data on the trends of compact clothes 
washer tub volumes that would suggest that the tub volume for such 
clothes washers has changed significantly. 76 FR 972, 1014 (January 6, 
2011). DOE did not receive any such data in response to its requests in 
the TP SNOPR. In addition, as discussed above, DOE does not have any 
consumer usage data indicating that consumers always machine dry the 
same size load from the wash cycle such that the average clothes washer 
load size can be directly applied to the clothes dryer test procedure, 
as suggested by AHAM. For these reasons, DOE did not revise the test 
load size for compact clothes dryers in the TP Final Rule. Id.
    NRDC also commented that the ECOS report states that if DOE were to 
test each model across a wide range of load sizes and report multiple 
values, it would help consumers choose the appropriate sized clothes 
dryer and to fill it with the recommended amount of clothing to dry as 
efficiently as possible. (NRDC, No. 30 at p. 30) DOE is not aware of 
any data indicating what load sizes typical consumers use or data on 
the percentage of clothes dryer cycles at different load sizes to 
determine how such results would be used to calculate an energy use or 
energy efficiency metric. DOE is also unaware of data showing how such 
a change would affect the measured EF compared to the existing test 
procedure, as required by EPCA. (42 U.S.C. 6293(e)(1)) DOE notes that 
requiring additional test cycles for different size loads would add 
significant testing burden on manufacturers. For these reasons, DOE did 
not amend the clothes dryer test procedure to require the testing of 
multiple test load sizes in the TP Final Rule.
    BSH proposed that tumble clothes dryers be tested with a load size 
relative to the drum volume, and that this relationship be linear. BSH 
commented that the load size that the consumer uses generally matches 
the drum size of the clothes dryer (the larger the drum the higher the 
average load size dried). According to BSH, using only two load sizes 
for a wide range of drum volumes will cause unfairness in comparison of 
different clothes dryers. For example, a standard clothes dryer with a 
125-liter drum volume but 60 centimeter (cm) housing (which is right 
above the limit to be ``compact'') has an unfair advantage when its 
energy efficiency is measured due to the fact that the load fills the 
drum much better than in a larger appliance. (BSH, No. 23 at p. 4) DOE 
is not aware of any consumer usage data indicating how load size varies 
with clothes dryer drum capacity. In addition, DOE is not aware of any 
data indicating how such a change would affect the measured efficiency. 
For these reasons, DOE did not amend the clothes dryer test procedure 
to require that the load size vary with drum capacity.
Water Temperature for Test Load Preparation
    The current clothes dryer test procedure specifies a water 
temperature of 100 [deg]F <plus-minus> 5 [deg]F for the test load 
preparation. (10 CFR part 430, subpart B, appendix D, section 2.7) The 
California Utilities, ACEEE, and NPCC stated that this initial clothes 
load temperature may have been common when most clothes washers used a 
hot water rinse. However, today almost all clothes washers now default 
to a cold water final rinse to save water heating energy. (California 
Utilities, No. 31 at pp. 3, 12; ACEEE, No. 24 at p. 2; NPCC, No. 32 at 
p. 2) According to ACEEE, today's clothes washers typically have a cold 
rinse default and consumers increasingly select cold water wash and 
rinse in response to public information campaigns and the introduction 
of special ``cold water wash'' detergents. (ACEEE, No. 24 at p. 2) The 
California Utilities, ACEEE, and NPCC recommended that DOE align the 
clothes dryer test method with the clothes washer test method by 
reducing the water temperature for clothes dryer test load preparation 
to 60 [deg]F <plus-minus> 5 [deg]F. (ACEEE, No. 24 at p. 2)
    As discussed in the TP Final Rule, DOE analyzed 2005 RECS data on 
the rinse water temperatures selected by consumers for clothes washer 
cycles, which indicates that for consumers that use a clothes washer in 
the home, approximately 80 percent of wash cycles per year use a cold 
rinse. 76 FR 972, 996 (January 6, 2011). In addition, DOE also noted 
that the clothes washer test procedure specifies a warm rinse 
temperature use factor of 27 percent, suggesting that for the majority 
of clothes washer cycles, consumers use the cold rinse. (10 CFR part 
430, subpart B, appendix J1) DOE also sought comment on the warm rinse 
temperature use factor in the recent proposal to amend the test 
procedure for residential clothes washers because it received consumer 
usage survey data from a manufacturer indicating that, for one clothes 
washer model with no cold rinse option on the cycle recommended for 
cotton clothes and a default cold rinse on all other cycles, users 
participating in the survey reported using warm rinse for 1.6 percent 
of all cycles. 75 FR 57556, 57571 (Sept. 21, 2010) For these reasons, 
DOE amended the clothes dryer test procedure to change the water 
temperature for clothes dryer test load preparation from 100 [deg]F 
<plus-minus> 5 [deg]F to 60 [deg]F <plus-minus> 5 [deg]F to be more 
representative of the clothes load after a cold rinse cycle at the end 
of the wash cycle. 76 FR 972, 996 (January 6, 2011).

[[Page 22474]]

Test Cloth
    The current clothes dryer test procedure specifies the use of 
energy test cloth consisting of a pure finished bleach cloth, made with 
a momie or granite weave, which is a blended fabric of 50-percent 
cotton and 50-percent polyester. Each energy test cloth measures 24 
inches by 36 inches. Additional specifications are provided in the test 
procedure for the weight, thread count, and allowable shrinkage. (10 
CFR part 430, subpart B, appendix D, section 2.7)
    The ECOS report stated that DOE should test a mix of cotton and 
synthetics of various sizes, including large sheets, towels, and jeans, 
rather than only testing small, uniform synthetic[hyphen]blend test 
cloths to more closely approximate real-world performance. The ECOS 
report also stated that this would deal more fairly with the real-world 
situation in which some fabrics have finished drying before others, 
causing the load to either finish before everything is dry or after 
some of the fabrics have been over-dried. NRDC also commented that the 
ECOS report presented test results using different mixes of test loads 
which showed that clothes dryers often stopped with the synthetic quite 
dry (less than 2-percent final RMC) but the cotton still damp (greater 
than 6-percent RMC). According to NRDC, if DOE were to test each model 
across a wide range of load types and report multiple values, it would 
help consumers choose an appropriately sized clothes dryer and to fill 
it with the recommended amount of clothing so that it would dry as 
efficiently as possible. (NRDC, No. 30 at pp. 22, 30) NRDC added that 
in this real-world scenario, clothes dryers may be less effective due 
to clothing balling up or the clothes dryer shutting off early due to a 
variety in cloth blends. NRDC added that certain techniques such as 
agitating the drum or reversing the cycle may help mitigate these 
problems and potentially increase efficiency in a real world scenario. 
NRDC also added that the standard DOE test cloths do not constitute a 
typical load and therefore do not accurately test clothes dryers' 
effectiveness at drying loads that have a variety of fabric types or 
are more likely to clump. NRDC suggested a mix of 100-percent cotton 
and 50:50 cotton/polyester as an alternative test load. (NRDC, No. 26 
at pp. 1, 3; NRDC, Public Meeting Transcript, No. 21.4 at p. 43)
    DOE is unaware of data to determine the composition of clothing 
types and materials that would be more representative of typical 
consumer clothing loads than the existing DOE test cloth and still 
produce accurate and repeatable results. Similarly, DOE is unaware of 
data showing the test-to-test repeatability of different test loads. 
Based on discussions with manufacturers, DOE understands the test 
material specified in the existing DOE clothes dryer test procedure 
produces the most repeatable results, and other tests loads are less 
repeatable. In addition, DOE also notes that requiring additional test 
cycles for loads with different clothes types and materials would add 
significant testing burden on manufacturers. For these reasons, DOE did 
not amend the clothes dryer test procedure in the TP Final Rule to 
change the DOE test load or to require the testing of multiple test 
loads composed of different clothes types and materials.
e. Drum Capacity Measurement
    The Joint Petitioners commented that DOE should clarify section 3.1 
of the clothes dryer test procedure regarding the measurement of drum 
capacity to specify that the clothes dryer's rear drum surface be 
supported on a platform scale to ``prevent deflection of the drum 
surface * * *'' instead of ``prevent deflection of the dryer.'' (Joint 
Petitioners, No. 33 at p. 25) As discussed in the TP Final Rule, DOE 
agrees with the comments that the reference to deflection of the 
``dryer'' is unclear and should be clarified to specify that the 
clothes dryer's rear drum surface should be supported on a platform 
scale to prevent deflection of the drum surface. For this reason, DOE 
amended the clothes dryer test procedure in TP Final Rule to reflect 
this change. 76 FR 972, 1019 (January 6, 2011).
f. HVAC Effects
    According to EPCA, any prescribed or amended test procedures shall 
be reasonably designed to produce test results which measure energy 
efficiency, energy use, water use, or estimated annual operating cost 
of a covered product during a representative average use cycle or 
period of use. (42 U.S.C. 6293(b)(3))
    NRDC and NPCC commented that DOE should analyze the effects of 
clothes dryers on a home's heating and cooling energy use. (NRDC, No. 
26 at pp. 1, 4; NPCC, No. 32 at p. 2) NRDC also commented that the 
current test procedure does not analyze the clothes dryer's effect on 
the heating and cooling of the surrounding room, in particular, whether 
the clothes dryer warms the room, cools it, or leaves it unchanged. 
NRDC stated that the test procedure does not distinguish between 
clothes dryers that vent their exhaust air outside (and require makeup 
air to be conditioned), and those that are unvented. (NRDC, No. 26 at 
pp. 1, 4; NRDC, No. 30 at p. 31) NPCC also commented that DOE's 
analysis of the economics of heat recovery clothes dryers should 
incorporate the reduced impact on space conditioning of this technology 
option. (NPCC, No. 32 at p. 2) The California Utilities recommended 
that the DOE clothes dryer test procedure be amended to measure the 
total airflow volume during the test cycle in order to gather data on 
heating, ventilation, and air conditioning (HVAC) loading. (California 
Utilities, No. 31 at pp. 9, 12)
    As discussed above, EPCA requires that any prescribed or amended 
test procedures be reasonably designed to produce test results which 
measure energy efficiency, energy use, water use, or estimated annual 
operating cost of a covered product during a representative average use 
cycle or period of use. (42 U.S.C. 6293(b)(3)) DOE believes that 
accounting for the effects of clothes dryers on HVAC energy use is 
inconsistent with the EPCA requirement that a test procedure measure 
the energy efficiency, energy use, or estimated annual operating cost 
of a covered product. As a result, DOE did not revise the clothes dryer 
test procedure to account for HVAC energy use in the TP Final Rule and 
does not account for HVAC energy use in these standards.
g. Efficiency Metric
    The energy efficiency metric currently used for clothes dryer 
energy conservation standards, EF, is defined on the basis of a per-
cycle measure of the lb. of clothes dried per kWh. (10 CFR 430.23)
    BSH commented that DOE should calculate yearly energy consumption 
for clothes dryers by considering a defined amount of laundry dried 
within a year. BSH stated that the energy consumption for the yearly 
load dried in small clothes dryer should be correlated to the energy 
consumption when the same yearly load is dried in a larger clothes 
dryer. BSH added that if only the number of loads is used then for a 
larger clothes dryer, the energy labeled would refer to a much larger 
amount of clothing than for a smaller clothes dryer. According to BSH, 
the values would not be comparable and it would appear to the consumer 
that the larger clothes dryer uses more energy per cycle than the 
smaller. In reality, when using a compact size clothes dryer consumers 
would run more cycles per year to dry their yearly amount of laundry. 
(BSH, No. 23 at p. 5) DOE is not aware of

[[Page 22475]]

consumer usage data showing the relationship between clothes dryer drum 
capacity and the amount of laundry dried by the consumer per year that 
would suggest that consumers typically dry the same amount of clothing 
per year, regardless of the drum capacity. For these reasons, DOE did 
not amend the clothes dryer test procedure in the TP Final Rule to 
specify a single value for the amount of laundry dried per year.
2. Room Air Conditioner Test Procedure
a. Standby Mode and Off Mode
Referenced Standards
    As noted above, EPCA directs DOE to amend its test procedures to 
include measures of standby mode and off mode energy consumption, 
taking into consideration the most current versions of IEC Standard 
62301 and IEC Standard 62087. (42 U.S.C. 6295(gg)(2)(A)) For the 
reasons discussed for the clothes dryer test procedure, DOE determined 
that only IEC Standard 62301 is relevant to the room air conditioner 
test procedure.
    AHAM supported DOE's evaluation of IEC Standard 62301 CDV for 
potential revisions to address standby mode and off mode power in the 
room air conditioner test procedure. AHAM commented that DOE would thus 
harmonize with international standards, including those developed in 
Canada and Europe. (AHAM, Public Meeting Transcript, No. 21.4 at p. 30) 
As discussed for clothes dryers in section III.A.1.a, DOE considered 
the current version, IEC Standard 62301 First Edition, as required by 
EPCA. For the reasons stated in the TP Final Rule, DOE amended its test 
procedures for room air conditioners in the final rule to incorporate 
by reference the clauses from IEC Standard 62301 First Edition proposed 
in the TP SNOPR, as well as the provisions of IEC Standard 62301 CDV 
for the mode definitions. 76 FR 972, 975-6 (January 6, 2011). DOE may 
consider incorporating by reference clauses from IEC Standard 62301 
Second Edition when that version has been published.
Testing Procedures
    EEI commented that the total number of standby hours would be 8,010 
if a product is plugged in all year (8,760 total hours in a year less 
the 750 cooling mode operating hours), and closer to 2,000 if 
unplugged. EEI requested clarification on the source of the 5,115 
standby hours. (EEI, Public Meeting Transcript, No. 21.4 at p. 37) DOE 
notes that the estimate of 5,115 total standby and off mode hours, 
explained in greater detail in the TP SNOPR (75 FR 37594, 37610 (June 
29, 2010), assumes (1) the cooling season length is 90 days or 2,160 
hours; (2) half of the products in the field would be unplugged outside 
of the cooling season, while the others would be in standby and/or off 
mode; and (3) that the cooling season hours not associated with active 
mode cooling are evenly split between off-cycle mode and standby mode 
or off mode. Off-cycle mode involves operation of the fan but not the 
compressor. DOE noted in the TP NOPR that it is not aware of any 
reliable data for hours spent in different standby and off modes for 
room air conditioners. 73 FR 7439, 74648-49 (Dec. 9, 2008). In the 
absence of data suggesting a different allocation of annual hours, DOE 
adopted the estimate of 5,115 annual hours standby and off mode hours 
in the TP Final Rule. 76 FR 972, 991 (January 6, 2011).
b. Active Mode Referenced Standards
    The current DOE room air conditioner test procedure incorporates by 
reference two industry test standards: (1) American National Standard 
(ANS) (since renamed American National Standards Institute (ANSI)) 
Z234.1-1972, ``Room Air Conditioners;'' \16\ and (2) American Society 
of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) 
Standard 16-69, ``Method of Testing for Rating Room Air Conditioners.'' 
\17\ (10 CFR part 430, subpart B, appendix F, section 1)
---------------------------------------------------------------------------

    \16\ ANSI standards are available at http://www.ansi.org.
    \17\ ASHRAE standards are available at http://www.ashrae.org.
---------------------------------------------------------------------------

    AHAM commented that its current room air conditioner standard is 
American National Standards Institute (ANSI)/AHAM RAC-1-2008. (AHAM, 
Public Meeting Transcript, No. 21.4 at p. 35; AHAM, No. 25 at p. 13) As 
discussed in the TP Final Rule, DOE adopted the amendments to reference 
the relevant sections of the current industry test standards for room 
air conditioners, which are designated as: (1) ANSI/AHAM RAC-1-R2008, 
``Room Air Conditioners;'' and (2) ANSI/American Society of Heating, 
Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 16-1983 
(RA 2009), ``Method of Testing for Rating Room Air Conditioners and 
Packaged Terminal Air Conditioners'' (ANSI/ASHRAE Standard 16-1983 (RA 
2009)). 76 FR 972, 978 (January 6, 2011)
c. Annual Active Mode Hours
    The current DOE room air conditioner test procedure assumes that 
room air conditioners have an average annual use of 750 hours. (10 CFR 
part 430.23(f)) DOE noted in chapter 3 of the preliminary TSD that 
DOE's TSD from September 1997, issued in support of the 1997 room air 
conditioner rulemaking, provides estimates for average annual operating 
hours closer to 500.\18\ DOE noted in the preliminary TSD developed in 
support of today's final rule, however, that a similar assessment of 
room air conditioner hours of operation developed in support of the 
June 2010 TP SNOPR suggests that the annual hours of operation have 
since increased and are now in fact close to 750. 75 FR 37594, 37633 
(June 29, 2010).
---------------------------------------------------------------------------

    \18\ U.S. Department of Energy--Office of Energy Efficiency and 
Renewable Energy, Technical Support Document for Energy Conservation 
Standards for Room Air Conditioners. September 1997. Chapter 1, 
section 1.5. Washington, DC, available at http://www.eere.energy.gov/buildings/appliance_standards/residential/room_ac.html
---------------------------------------------------------------------------

    EEI commented that the active mode hours for room air conditioners 
may be more than the 750 hours currently specified in the DOE room air 
conditioner test procedure and questioned whether the 750 hours reflect 
both residential and commercial applications. (EEI, Public Meeting 
Transcript, No. 21.4 at p. 36) As discussed in the TP Final Rule, DOE 
noted that estimates using data from the EIA's 2005 RECS \19\ support 
maintaining the 750 annual operating hours specification. As a result, 
DOE did not amend the room air conditioner test procedure to change the 
number of annual operating hours. 76 FR 972, 978 (January 6, 2011).
---------------------------------------------------------------------------

    \19\ U.S. Department of Energy-Energy Information 
Administration. ``Residential Energy Consumption Survey,'' 2005 
Public Use Data Files, 2005. Washington, DC. Available online at: 
http://www.eia.doe.gov/emeu/recs/.
---------------------------------------------------------------------------

d. Part-Load Operation
    DOE noted in the preliminary TSD (chapter 5, ``Engineering 
Analysis'') that the DOE room air conditioner test procedure at 
appendix F measures full-load performance but is not able to assess 
energy savings associated with technologies which improve part-load 
performance.
    DOE considered amendments to its room air conditioner test 
procedure to measure part-load performance, but did not propose such 
changes, as explained in the June 2010 TP SNOPR and the TP final rule. 
75 FR 37594, 37634 (June 29, 2010); 76 FR 972, 1016 (January 6, 2011). 
DOE concluded that developing an additional test for part load, or 
switching to a seasonal metric to integrate part-load performance is 
not warranted. DOE noted that (1) sufficient information is not 
available at this time regarding use of room air conditioner

[[Page 22476]]

features that prevent over-cooling; (2) widespread use of part-load 
technology in room air conditioners is not likely to be stimulated by 
the development of a part-load or seasonal metric at this time, and 
therefore, the significant effort required to develop an accurate part-
load metric is not likely to be justified by the expected minimal 
energy savings; and (3) key design changes that improve full-load 
efficiency also improve part-load efficiency, so the existing EER 
metric is already a strong indication of product efficiency over a wide 
range of conditions.
    DOE stated in the preliminary TSD that it did not consider 
technologies such as variable speed compressors and thermostatic 
expansion valves as design options during the engineering analysis 
because these design options save energy only during part-load 
operation. DOE expects, based on available data and the considerations 
discussed in the test procedure SNOPR and reiterated above, that such 
technologies will not save enough energy to be cost effective.
    DOE requested comments regarding additional design options that it 
should consider in the engineering analysis. (See the preliminary TSD 
Executive Summary, section ES.4).
    NRDC commented that DOE should further analyze the efficiency of 
part-load operation. NRDC stated that DOE assumed that room air 
conditioners are generally undersized and run at full capacity and, 
therefore, did not take into consideration the potential to improve 
part-load efficiency. NRDC recommended that DOE further investigate the 
underlying assumption that room air conditioners are almost always run 
at full capacity and analyze the potential to improve part-load 
operation efficiency. (NRDC, No. 26 at p. 5) The comment does not 
provide any new information regarding room air conditioner operation 
that would allow development of an appropriate seasonal efficiency 
metric. As discussed in the TP Final Rule, development of such a metric 
that would take part load operation into account would require 
knowledge of the distribution of hours spent by room air conditioners 
at different load levels and at different outdoor and indoor 
temperature and humidity conditions. 76 FR 972, 1016 (January 6, 2011). 
Because such data is not available, DOE cannot establish an appropriate 
efficiency metric and cannot properly evaluate part-load technologies. 
DOE may amend the test procedure to account for part-load performance 
in a future rulemaking if sufficient information becomes available.
    DOE also notes that the existing EER metric, which represents most 
of the CEER metric that is the basis of the energy standard prescribed 
in today's rule, is already a strong indicator of product efficiency 
over a wide range of conditions. Most of the design options that 
improve efficiency measured using EER would also improve efficiency 
measured using a part-load metric. For these reasons, DOE did not amend 
its room air conditioner test procedure to measure part-load 
performance. 76 FR 972, 1016 (January 6, 2011).
e. Distribution of Air
    NRDC commented that DOE should consider how effectively room air 
conditioners distribute air throughout the room, adding that if all the 
cooling is provided by convection into the space, the effectiveness of 
delivering that cooling by the fan and integral diffuser may have a 
significant impact on energy use. NRDC stated that the DOE test 
procedure should take into account how far into the room the airflow 
travels and whether the unit allows for adjustments to the airflow 
pattern. NRDC also commented that many units will be placed at sill 
height, but buildings with wall sleeves will likely have units that are 
installed below the sill, which could pose different concerns with room 
air distribution to provide adequate mixing to avoid drafts. (NRDC, No. 
26 at p. 6)
    DOE notes that the DOE test procedure measures the cooling 
delivered by the room air conditioner regardless of the distribution of 
the cooling air within the test chamber. Thus, design options that 
optimize distribution of the cooling air would not improve the 
measurement.
    DOE agrees with the comment's premise that the energy use of a room 
air conditioner used by a consumer may be affected by the air 
circulation patterns it establishes in a room. For example, a consumer 
located in a room far from the unit and not in line with the product's 
discharge air outlet may keep the unit operating longer to achieve 
comfortable local room conditions. This influence has as much to do 
with installation and use as it does with product characteristics. The 
relationship between room air circulation and room air conditioner 
energy use is not sufficiently well understood to allow any 
consideration of integration of such factors into the energy use 
metric. DOE is not aware of data evaluating the impact a product's air 
distribution patterns have on product energy use by consumers. As a 
result, this issue is not addressed by today's rule.
3. Effects of Test Procedure Revisions on the Measured Efficiency
    In any rulemaking to amend a test procedure, DOE must determine to 
what extent, if any, the proposed test procedure would alter the 
measured energy efficiency of any covered product as determined under 
the existing test procedure. (42 U.S.C. 6293(e)(1)) If DOE determines 
that the amended test procedure would alter the measured efficiency of 
a covered product, DOE must amend the applicable energy conservation 
standard accordingly. In determining the amended energy conservation 
standard, the DOE must measure, pursuant to the amended test procedure, 
the energy efficiency, energy use, or water use of a representative 
sample of covered products that minimally comply with the existing 
standard. The average of such energy efficiency, energy use, or water 
use levels determined under the amended test procedure shall constitute 
the amended energy conservation standard for the applicable covered 
products. (42 U.S.C. 6293(e)(2)) EPCA also states that models of 
covered products in use before the date on which the amended energy 
conservation standard becomes effective (or revisions of such models 
that come into use after such date and have the same energy efficiency, 
energy use, or water use characteristics) that comply with the energy 
conservation standard applicable to such covered products on the day 
before such date shall be deemed to comply with the amended energy 
conservation standard. (42 U.S.C. 6293(e)(3))
    EPCA also provides that amendments to the test procedures to 
include standby mode and off mode energy consumption will not determine 
compliance with previously established standards. (U.S.C. 
6295(gg)(2)(C)) Because the amended test procedures for standby mode 
and off mode energy consumption would not alter existing measures of 
energy consumption or efficiency, these amendments would not affect a 
manufacturer's ability to demonstrate compliance with previously 
established standards.
    For the TP Final Rule, DOE investigated how the amended test 
procedures would affect the measured efficiency as compared to the 
existing DOE test procedures. The following sections discuss these 
effects for each product.
a. Clothes Dryers
    The Joint Petitioners proposed that the final rule amending the 
clothes dryer test procedure also amend the

[[Page 22477]]

standards in the Joint Petition according to the procedures in section 
323(e)(2) of EPCA, except that for the purposes of establishing a 
representative sample of products, DOE should choose a sample of 
minimally compliant dryers which automatically terminate the drying 
cycle at no less than 4-percent RMC. (Joint Petitioners, No. 33 at p. 
17)
    As discussed above, DOE did not adopt amendments to the clothes 
dryer test procedure to better account for automatic cycle termination. 
As a result, DOE did not consider any revisions to the energy 
conservation standards based on amendments for automatic cycle 
termination. However, DOE notes that EPCA does not include any 
exceptions that would allow for the measurement of only dryers that 
automatically terminate the drying cycle at no less than 4-percent RMC. 
(42 U.S.C. 6293(b)(1)-(3))
    As part of the TP Final Rule, DOE conducted testing on a sample of 
17 representative clothes dryers to evaluate the effects of the 
amendments to the clothes dryer test procedure on the measured EF. 76 
FR 972, 1026-27 (January 6, 2011). DOE tested these units according to 
the amended clothes dryer test procedure in the TP Final Rule, 
conducting up to three tests for each test unit and averaging the 
results. The results from this testing are shown below in Table III.2. 
DOE noted in its testing that the amendments to the initial RMC, water 
temperature for test load preparation, and load size had an effect on 
the measured EF as compared to the existing test procedure. For vented 
electric-standard size clothes dryers tested using the amended test 
procedure, the measured EF increases by an average of about 20.1 
percent. For vented gas clothes dryers, the measured EF increased by an 
average of about 19.8 percent. For vented electric compact 120V and 
240V clothes dryers, the measured EF increased by an average of about 
15.6 and 12.8 percent, respectively. For ventless electric compact 240V 
clothes dryers and ventless electric combination washer/dryers, the 
measured EF increased by an average of about 13.6 and 11.4 percent, 
respectively, as compared to the measured EF using the existing test 
procedure with only the amendments for ventless clothes dryers. (That 
is, without the changes to the initial RMC, water temperature for test 
load preparation, or other changes) DOE noted that the increase in 
measured EF is greater for the standard-size products (that is, vented 
electric standard and vented gas clothes dryers) than for compact-size 
products due to the additional amendments to increase the test load 
size for standard-size products. 76 FR 972, 1027 (January 6, 2011). As 
discussed in section IV.C.2.a, DOE applied these percentage increases 
in the measured EF based on the test procedure amendments for each 
product class to the efficiency levels proposed in the preliminary 
analysis.

Table III.2--DOE Test Results To Evaluate the Effects of the Clothes Dryer Test Procedure Amendments on Measured
                                                       EF
----------------------------------------------------------------------------------------------------------------
                                                                         Average EF lb/kWh
                                                                 --------------------------------     Change
                            Test unit                              Current test    Amended test      (percent)
                                                                     procedure       procedure
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard:
    Unit 1......................................................            3.07            3.69            20.4
    Unit 2......................................................            3.14            3.77            19.5
    Unit 3......................................................            3.20            3.83            19.6
    Unit 4......................................................            3.28            3.92            19.4
    Unit 5......................................................            3.24            3.96            22.5
    Unit 6......................................................            3.12            3.72            19.1
Vented Gas:
    Unit 7......................................................            2.78            3.36            20.6
    Unit 8......................................................            2.83            3.40            19.9
    Unit 9......................................................            2.85            3.42            20.2
    Unit 10.....................................................            2.80            3.37            20.5
    Unit 11.....................................................            2.98            3.50            17.6
Vented Electric Compact (240V):
    Unit 12.....................................................            3.19            3.56            11.4
    Unit 13.....................................................            2.93            3.35            14.2
Vented Electric Compact (120V):
    Unit 14.....................................................            3.23            3.74            15.6
Ventless Electric Compact (240V):
    Unit 15.....................................................            2.37            2.69            13.6
Ventless Electric Combo Washer/Dryer:
    Unit 16.....................................................            2.01            2.27            12.5
    Unit 17.....................................................            2.50            2.76            10.3
----------------------------------------------------------------------------------------------------------------

    Table III.3 shows how the current energy conservation standards are 
affected by the amendments to the DOE clothes dryer test procedure.

 Table III.3--Energy Factor of a Minimally Compliant Clothes Dryer With
                 the Current and Amended Test Procedure
------------------------------------------------------------------------
                                                     EF lb/kWh
                                         -------------------------------
              Product class                Existing test   Amended test
                                             procedure       procedure
------------------------------------------------------------------------
1. Electric, Standard (4.4 ft\3\ or                 3.01            3.62
 greater capacity)......................

[[Page 22478]]

 
2. Electric, Compact (120 v) (less than             3.13            3.62
 4.4 ft\3\ capacity)....................
3. Electric, Compact (240 v) (less than             2.90            3.27
 4.4 ft\3\ capacity)....................
4. Gas..................................            2.67            3.20
------------------------------------------------------------------------

b. Room Air Conditioners
    The Joint Petitioners proposed that the final rule amending the 
room air conditioner test procedure amend the standards in the 
consensus agreement according to the procedures in section 323(e)(2) of 
EPCA. (Joint Petitioners, No. 33 at p. 18) These are the provisions 
that require DOE to adjust the efficiency standard if DOE determines 
that changes in the energy test procedure alter the measured energy use 
of covered products. While the measured efficiency of room air 
conditioners is altered by the incorporation of standby and off mode 
energy use in the new efficiency metric. However, DOE determined in the 
TP Final Rule that the amendments to the room air conditioner test 
procedure do not impact the measurement of EER while providing more 
accurate and repeatable measurements of capacity and greater 
flexibility to manufacturers in selecting equipment and facilities. 76 
FR 972, 1028 (January 6, 2011). For this reason, DOE believes that 
revisions to the energy conservation standards for room air 
conditioners because of the amendments to the test procedure would not 
be warranted.

B. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis 
based on information it has gathered on all current technology options 
and 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 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 these means for 
improving efficiency are technologically feasible. DOE considers a 
technology option to be technologically feasible if it is incorporated 
into commercially available products or working prototypes. 10 CFR part 
430, subpart C, appendix A, section 4(a)(4)(i).
    Once DOE has determined that particular technology options are 
technologically feasible, it further evaluates each of these technology 
options in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. Section IV.B of this notice discusses the results of the 
screening analysis for clothes dryers and room air conditioners, 
particularly the designs DOE considered, those it screened out, and 
those that are the basis for the trial standard levels (TSLs) in this 
rulemaking. For further details on the screening analysis for this 
rulemaking, see chapter 4 of the technical support document 
accompanying today's direct final rule (direct final rule 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, DOE determined the maximum technologically feasible 
(``max-tech'') improvements in energy efficiency for clothes dryers and 
room air conditioners in the engineering analysis, using the design 
options used in the most efficient products available on the market or 
in working prototypes. (See chapter 5 of the direct final rule TSD.) 
Table III.4 lists the max-tech levels that DOE determined for this 
rulemaking.

   Table III.4--Maximum Technologically Feasible Efficiency Levels for
          Residential Clothes Dryers and Room Air Conditioners
------------------------------------------------------------------------
                       Residential clothes dryers
-------------------------------------------------------------------------
                                                               Max-tech
                       Product class                          CEF lb/kWh
------------------------------------------------------------------------
1. Vented Electric, Standard (4.4 ft\3\ or greater                  5.42
 capacity).................................................
2. Vented Electric, Compact (120 V) (less than 4.4 ft3              5.41
 capacity).................................................
3. Vented Electric, Compact (240 V) (less than 4.4 ft\3\            4.89
 capacity).................................................
4. Vented Gas..............................................         3.61
5. Ventless Electric, Compact (240 V) (less than 4.4 ft\3\          4.03
 capacity).................................................
6. Ventless Electric Combination Washer/Dryer..............         3.69
------------------------------------------------------------------------


 
                          Room air conditioners
-------------------------------------------------------------------------
                                                               Max-tech
                       Product class                         CEER Btu/Wh
------------------------------------------------------------------------
1. Without reverse cycle, with louvered sides, and less            11.67
 than 6,000 Btu/h..........................................
2. Without reverse cycle, with louvered sides, and 6,000 to        11.96
 7,999 Btu/h...............................................
3. Without reverse cycle, with louvered sides, and 8,000 to        11.96
 13,999 Btu/h..............................................

[[Page 22479]]

 
4. Without reverse cycle, with louvered sides, and 14,000          11.96
 to 19,999 Btu/h...........................................
5A. Without reverse cycle, with louvered sides, and 20,000         10.15
 to 27,999 Btu/h...........................................
5B. Without reverse cycle, with louvered sides, and 28,000          9.80
 Btu/h or more.............................................
6. Without reverse cycle, without louvered sides, and less         10.35
 than 6,000 Btu/h..........................................
7. Without reverse cycle, without louvered sides, and 6,000        10.35
 to 7,999 Btu/h............................................
8A. Without reverse cycle, without louvered sides, and             10.35
 8,000 to 10,999 Btu/h.....................................
8B. Without reverse cycle, without louvered sides, and             10.02
 11,000 to 13,999 Btu/h....................................
9. Without reverse cycle, without louvered sides, and              10.02
 14,000 to 19,999 Btu/h....................................
10. Without reverse cycle, without louvered sides, and              9.80
 20,000 Btu/h or more......................................
11. With reverse cycle, with louvered sides, and less than         11.96
 20,000 Btu/h..............................................
12. With reverse cycle, without louvered sides, and less           10.15
 than 14,000 Btu/h.........................................
13. With reverse cycle, with louvered sides, and 20,000 Btu/       10.35
 h or more.................................................
14. With reverse cycle, without louvered sides, and 14,000         10.02
 Btu/h or more.............................................
15. Casement-Only..........................................        10.35
16. Casement-Slider........................................        10.35
------------------------------------------------------------------------

a. Clothes Dryers
    For electric vented and vent-less clothes dryers, the max-tech 
level corresponds to the efficiency improvement associated with 
incorporating heat pump technology, according to information from 
manufacturer interviews and available research on heat pump dryers. For 
vented gas clothes dryers, the max-tech level is the value proposed in 
the framework document was based on data contained in the CEC product 
database. AHAM submitted aggregated incremental manufacturing cost data 
in support of this max-tech efficiency level for vented gas clothes 
dryers. As discussed in chapter 5 of the preliminary TSD, multiple 
manufacturers stated during interviews that the current maximum 
efficiency listed for vented gas clothes dryers in a more recent 
version of the CEC product database is not achievable. Also, as 
discussed in chapter 5 of the preliminary TSD, DOE testing of the 
``maximum-available'' vented gas clothes dryer in this more recent 
version of the CEC product database determined that this unit did not 
achieve the rated efficiency. For these reasons, DOE considered the 
vented gas clothes dryer max-tech value for which AHAM submitted 
aggregated incremental manufacturing costs. This max-tech level was 
supported by multiple manufacturers during interviews.
b. Room Air Conditioners
    As described in the direct final rule TSD (chapter 5, ``Engineering 
Analysis''), DOE conducted a full engineering analysis for seven room 
air conditioner product classes, which comprise a large percentage of 
identified products on the market. DOE's approach for extending the 
analysis of the proposed standard levels to the non-analyzed product 
classes is described in chapter 5, ``Engineering Analysis'', of the 
direct final rule TSD. This section of this notice reports specifically 
on the max-tech efficiency levels for the product classes directly 
analyzed in the engineering analysis.
    DOE used the full set of design options considered applicable to 
these product classes to determine the max-tech efficiency levels. (See 
chapter 5 of the direct final rule TSD.) Table III.5, below, lists the 
max-tech levels that DOE determined for this rulemaking--the table 
shows the levels for the directly analyzed product classes (see section 
IV.C regarding discussion of the product classes that were directly 
analyzed). The max-tech levels that DOE determined for this rulemaking 
are based on design options that are used in commercially-available 
products.

    Table III.5--Max-Tech EERs for the Room Air Conditioner Products
                               Rulemaking
------------------------------------------------------------------------
                                                             Combined
                                                              energy
                                                            efficiency
                                                            ratio (EER)
     Analyzed product class            Description             level
                                                         ---------------
                                                          DOE final rule
                                                             max-tech
------------------------------------------------------------------------
1..............................  Less than 6,000 Btu/h,             11.7
                                  without reverse cycle
                                  and with louvered
                                  sides.
2..............................  6,000 to 7,999 Btu/h,              *N/A
                                  without reverse cycle
                                  and with louvered
                                  sides.
3..............................  8,000 to 13,999 Btu/h,             12.0
                                  without reverse cycle
                                  and with louvered
                                  sides.
4..............................  14,000 to 19,999 Btu/h,            *N/A
                                  without reverse cycle
                                  and with louvered
                                  sides.
5A.............................  20,000 Btu/h to 27,999             10.2
                                  Btu/h, without reverse
                                  cycle and with
                                  louvered sides.
5B.............................  28,000 Btu/h or more,               9.8
                                  without reverse cycle
                                  and with louvered
                                  sides.
8A.............................  8,000 to 10,999 Btu/h,             10.4
                                  without reverse cycle
                                  and without louvered
                                  sides.
8B.............................  11,000 to 13,999 Btu/h,            10.0
                                  without reverse cycle
                                  and without louvered
                                  sides.
------------------------------------------------------------------------

    The DOE max-tech levels differ from those presented in the 
preliminary TSD. They are higher for three of the analyzed product 
classes, and lower for three (one product class was not analyzed during 
the preliminary analysis). The engineering analysis revisions are 
discussed in section IV.C.2.b below.
    DOE determined that max-tech levels for most room air conditioner 
product classes higher than the commercially available max-tech were 
technologically

[[Page 22480]]

feasible. Although the commercially available products generally do not 
use all the energy efficient design options considered in the DOE max-
tech analyses, the design options are all used in commercially 
available products, some of which combine nearly all of the design 
options used in the DOE max-tech configurations.
    DOE determined the max-tech levels of each analyzed product class 
as part of its engineering analysis. The max-tech levels represent the 
most efficient design option combinations applicable for the analyzed 
products. Details of this analysis are described in the direct final 
rule TSD in chapter 5. DOE used different design option groups for each 
analyzed product class's max-tech design, as indicated in Table III.6.
[GRAPHIC] [TIFF OMITTED] TR21AP11.000

    Stakeholder comments and questions regarding the preliminary 
analysis max-tech levels primarily addressed the max-tech levels that 
DOE selected for the analyses. Some stakeholders argued that max 
available products exist at higher levels, while others argued that the 
conversion to R-410A refrigerant requires a re-examination of max-tech 
levels.
c. Available Max-Tech Products With Higher EER Ratings
    Numerous stakeholders commented that DOE should update its analysis 
to include all current ENERGY STAR[supreg] and max-tech units on the 
market. The California Utilities suggested that DOE consider the 
current best R-410A products on the ENERGY STAR list (California 
Utilities, No. 31 at pp. 16-17). The California Utilities also pointed 
out that the ENERGY STAR Database listed products with a 13.5 EER, and 
that the CEC Database listed four products with a 13.8 EER (California 
Utilities, No. 31 at p. 13). The Northwest Power and Conservation 
Council (NPCC) and ACEEE also commented that there were higher 
efficiency products available than had been assumed by DOE (NPCC, No. 
32 at p. 4; ACEEE, No. 24 at p. 4).
    DOE is aware that the ENERGY-STAR and CEC databases list products 
that exceed the max-tech EER of 12.0 that DOE identified in the 
preliminary analysis. Table III.7 lists products listed at 12.0 EER or 
higher in one or both of these databases.

Table III.7--Room Air Conditioner Models of Interest for Max-Tech Analysis, as Listed in the ENERGY STAR and CEC
                                                    Databases
----------------------------------------------------------------------------------------------------------------
                                                                                                  Source
                                                                                 Listed  -----------------------
                    Brand                                  Model                  EER                   ENERGY
                                                                                              CEC        STAR
----------------------------------------------------------------------------------------------------------------
Climette....................................  CH1826A........................       13.8   <SUP>[bcheck]</SUP>   ..........
Comfort-Aire................................  REC-183........................       13.8   <SUP>[bcheck]</SUP>   ..........
Fedders.....................................  AED18E7DG......................       13.8   <SUP>[bcheck]</SUP>   ..........
Maytag......................................  MED18E7A.......................       13.8   <SUP>[bcheck]</SUP>   ..........
Fedders.....................................  A7Q06F2A.......................       13.4   <SUP>[bcheck]</SUP>   ..........
Turbo Air...................................  TAS-09EH.......................       13.5  ..........   <SUP>[bcheck]</SUP>
Turbo Air...................................  TAS-12EH.......................       13.0  ..........   <SUP>[bcheck]</SUP>
Turbo Air...................................  TAS-18EH.......................       13.0  ..........   <SUP>[bcheck]</SUP>
Friedrich...................................  SS10M10........................       12.0   <SUP>[bcheck]</SUP>    <SUP>[bcheck]</SUP>
Friedrich...................................  YS09L10........................       12.0   <SUP>[bcheck]</SUP>    <SUP>[bcheck]</SUP>
Friedrich...................................  SS10L10........................       12.0   <SUP>[bcheck]</SUP>    <SUP>[bcheck]</SUP>
Friedrich...................................  XQ06M10........................       12.0   <SUP>[bcheck]</SUP>    <SUP>[bcheck]</SUP>
Friedrich...................................  SS12M10........................       12.0   <SUP>[bcheck]</SUP>   ..........
Haier.......................................  ESAD4066.......................       12.0  ..........   <SUP>[bcheck]</SUP>
----------------------------------------------------------------------------------------------------------------


[[Page 22481]]

    DOE searched product databases and manufacturer Web sites to gather 
information about these products and to determine whether these 
products represented valid room air conditioner ratings. DOE's 
investigation indicates that none of the products listed with EER 
higher than 12.0 represent valid room air conditioner ratings, and that 
some of the products rated at an EER of 12.0 are also invalid 
representations. The first five products in the table are listed with 
much lower EER ratings in Natural Resources Canada (NRCan) 
database.\20\ The three Turbo-Air products are ductless mini-split 
products (as identified by the manufacturer's Web site \21\), not room 
air conditioners. The Friedrich SS12M10 has been re-rated at lower than 
12.0 EER \22\, and the validity of the 12.0 rating of the Haier 
ESAD4066 is likely also incorrect, as discussed in greater detail 
below. Consequently, DOE concludes that its identification of a max-
tech available level no higher than 12.0 EER is valid.
---------------------------------------------------------------------------

    \20\ (1) Natural Resources Canada, Office of Energy Efficiency. 
EnerGuide for Equipment--EnerGuide Room Air Conditioner Directory 
2002. 2002; (2) Room Air Conditioner Model Listing. ``EnerGuide Room 
Air Conditioner Directory 2004'' http://oee.nrcan.gc.ca/.
    \21\ Product Specifications and Descriptions for Turbo Air 
Products TAS-09EH, TAS-12EH, TAS-18EH. http://www.turboairinc.net/productspecs/productspecs.html.
    \22\ Friedrich product specifications. Specifications for 
SS12M10. http://kuhl.friedrich.com/model-specifications/.
---------------------------------------------------------------------------

    The California Utilities stated that the analysis for room air 
conditioners was quite favorable in terms of cost-effectiveness, and 
that many of the analyzed efficiency levels had LCC savings relative to 
the baseline levels. They indicated that, if DOE's selected efficiency 
levels are as cost-effective as the analysis suggests, that there may 
be additional design options or higher efficiency levels that also 
merit DOE's analysis. (California Utilities, No. 31 at p. 13) PG&E 
asked whether DOE would consider higher max-tech levels that might 
result in more stringent standards (Public Meeting Transcript, No. 21.4 
at p. 130).
    DOE is required to establish energy conservation standards that 
achieve the maximum improvement in energy efficiency that is 
technologically feasible and economically justified. (42 U.S.C. 
6295(o)(2)). DOE developed max-tech levels in the preliminary analysis 
and made adjustments in the engineering analysis based on new 
information, as mentioned above, particularly regarding compressors 
designed for R-410A refrigerant. The engineering analysis adjustments 
are discussed in more detail in section IV.C.2.b below. DOE determined 
that the products cited by the commenters that appeared to have higher 
efficiencies than the max-tech levels either were not room air 
conditioners or did not have valid ratings. The max-tech levels 
incorporate all applicable design options for each of the product 
classes, and based on DOE's research and engineering analysis, DOE does 
not believe that products with higher efficiency than DOE's max-tech 
are technologically feasible.
d. Consideration of Conversion to R-410A Refrigerant in Max-Tech 
Selections
    As detailed in the direct final rule TSD (chapter 5), the use of 
HCFC-22 refrigerant in room air conditioners was phased out starting 
January 1, 2010. The industry has switched to R-410A refrigerant, which 
has required significant design modification. Although DOE based its 
preliminary analyses on use of R-410A refrigerant because HCFC-22 can 
no longer be used, few R-410A products were available for reverse 
engineering when DOE conducted the preliminary analyses. Also, there 
was limited information regarding compressors designed for the new 
refrigerant, or regarding manufacturers' experiences developing product 
designs for the new refrigerant.
    GE Consumer & Industrial (GE) asked during the March 2010 public 
meeting whether any of the models considered for the engineering 
analysis (specifically the max-tech levels) were R-410A products (GE, 
Public Meeting Transcript, No. 21.4 at pp. 72-73). DOE responded that 
it based the max-tech analysis of product class 1 on a 12 EER R-410A 
product that was available at the time of the analysis. GE commented 
that Consumer Reports published an article in October 2008 \23\ in 
which it reported on test results indicating that this product's 
efficiency was not 12 EER (Public Meeting Transcript, No. 21.4 at 72-
73). GE indicated that DOE should not consider this model to be 
representative of the technologies or costs required to achieve 12 EER. 
GE recommended that DOE instead use an alternative model to represent 
this efficiency level: the Friedrich model XQ06M10,\24\ which has a 
6,000 Btu/h capacity and 12.0 EER, with a retail price of over $600 and 
a weight of 72 lbs.
---------------------------------------------------------------------------

    \23\ ``Energy Star has lost some luster.'' Consumer Reports. 
October 2008. Pg. 24 Vol. 73 No. 10. Copyright 2008 Consumers Union 
of U.S., Inc.
    \24\ The GE comment identified Friedrich model AQ06M10, but the 
listing on the Friedrich Web site is XQ06M10 for a product matching 
the GE description (same capacity, EER, weight, and other relevant 
attributes).
---------------------------------------------------------------------------

    The California Utilities requested clarification on DOE's decision 
to not pursue a full teardown of the single R-410A unit identified in 
the preliminary analysis (California Utilities, No. 31 at p. 17). In 
response, DOE notes that it had obtained sufficient information about 
this unit to allow development of both an energy model and 
manufacturing cost model through close examination of heat exchanger 
details, identification of the compressor and fan motor model number, 
and measurement of fan power input.
    DOE considered the Consumer Reports article regarding the product 
identified in the preliminary analysis, which was initially considered 
to represent 12.0 EER using R-410A. Matching this performance level 
with the energy model required making some input assumptions that DOE 
considers unlikely, particularly for the condenser air flow rate. Given 
the information available, DOE agrees with GE's suggestion to instead 
use the Friedrich 12.0 EER product as a representation of this 
performance level. The revised analysis for product class 1 is based on 
calibration of the energy model to match the performance of the 
Friedrich product. DOE conducted a teardown of this product to verify 
its design details.
    The analysis shows that the product class 1 max-tech level is 11.8, 
slightly lower than 12. This reflects (1) reduction of the capacity 
from the 6,000 Btu/h of the Friedrich unit to the 5,000 Btu/h 
considered representative for the product class, and (2) adopting a 50 
lb. product weight limit, as suggested by AHAM (AHAM, No. 25 at p. 6) 
AHAM commented that OSHA recommends that articles heavier than 50 lbs. 
should be lifted by two rather than one person. Id. DOE considers this 
limit to be an appropriate demarcation for product class 1, since most 
of these products currently weigh less than 50 lb. Increase in weight 
beyond 50 lbs., requiring additional personnel for installation, 
represents a distinct reduction in consumer utility (specifically, the 
ability to remove the unit from the window during the off-season, 
relocate it to other windows without calling an installer, or both). 
Size limits for room air conditioners are discussed in greater detail 
in section IV.C.2.b, below.
    During the final rule analysis, DOE also considered new products of 
other product classes that use R-410A refrigerant and adjusted its 
analysis accordingly based on new information regarding designs and 
efficiency levels

[[Page 22482]]

of these products. Adjustments DOE made to the engineering analysis 
during the final rule phase are detailed in section IV.C.2.b below, and 
in chapter 5 of the TSD.

C. Energy Savings

1. Determination of Savings
    DOE used its NIA spreadsheet model to estimate energy savings from 
amended standards for the products that are the subject of this 
rulemaking.\25\ For each TSL, DOE forecasted energy savings beginning 
in 2014, the year that manufacturers would be required to comply with 
amended standards, and ending in 2043. DOE quantified the energy 
savings attributable to each TSL as the difference in energy 
consumption between the standards case and the base case. The base case 
represents the forecast of energy consumption in the absence of amended 
mandatory efficiency standards, and considers market demand for more-
efficient products.
---------------------------------------------------------------------------

    \25\ The NIA spreadsheet model is described in section IV.G of 
this notice.
---------------------------------------------------------------------------

    The NIA spreadsheet model calculates the electricity savings in 
``site energy'' expressed in kWh. Site energy is the energy directly 
consumed by appliances at the locations where they are used. DOE 
reports national energy savings on an annual basis in terms of the 
aggregated source (primary) energy savings, the savings in the energy 
used to generate and transmit the site energy. (See direct final rule 
TSD chapter 10.) To convert site energy to source energy, DOE derived 
annual conversion factors from the model used to prepare the EIA Annual 
Energy Outlook 2010 (AEO2010).
2. Significance of Savings
    As noted above, DOE cannot adopt a standard for a covered product 
if such standard would not result in ``significant'' energy savings. 42 
U.S.C. 6295(o)(3)(B) While 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 (DC Cir. 1985), indicated 
that Congress intended ``significant'' energy savings in this context 
to be savings that were not ``genuinely trivial.'' The energy savings 
for all of the TSLs considered in this rulemaking are nontrivial, and, 
therefore, DOE considers them ``significant'' within the meaning of 42 
U.S.C. 6295(o)(3)(B).

D. Economic Justification

1. Specific Criteria
    As noted in section II.B, 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 an amended standard on manufacturers, 
DOE first determines the quantitative impacts using an annual cash-flow 
approach. This step includes both a short-term assessment--based on the 
cost and capital requirements during the period between the issuance of 
a regulation and when entities must comply with the regulation--and a 
long-term assessment over a 30-year analysis 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 analysis of 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 different DOE regulations and 
other regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and the PBP associated with new or amended standards. 
The LCC, specified separately in EPCA as one of the seven factors to be 
considered in determining the economic justification for a new or 
amended standard, 42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the 
following section. For consumers in the aggregate, DOE also calculates 
the national net present value of the economic impacts on consumers 
over the forecast period used in a particular rulemaking.
b. Life-Cycle Costs
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy and 
maintenance and repair expenditures) discounted over the lifetime of 
the product. The LCC savings for the considered efficiency levels are 
calculated relative to a base case that reflects likely trends in the 
absence of amended standards. The LCC analysis requires a variety of 
inputs, such as product prices, product energy consumption, energy 
prices, maintenance and repair costs, product lifetime, and consumer 
discount rates. DOE assumed in its analysis that consumers will 
purchase the considered products in 2014.
    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. A distinct advantage 
of this approach is that DOE can identify the percentage of consumers 
estimated to receive LCC savings or experience an LCC increase, in 
addition to the average LCC savings associated with a particular 
standard level. In addition to identifying ranges of impacts, DOE 
evaluates the LCC impacts of potential standards on identifiable 
subgroups of consumers that may be disproportionately affected by a 
national standard.
c. Energy Savings
    While significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings expected to result directly 
from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE uses the NIA 
spreadsheet results in its consideration of total projected energy 
savings.
d. 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 sought to 
develop standards for clothes dryers and room air conditioners that 
would not lessen the utility or performance of these products. (42 
U.S.C. 6295(o)(2)(B)(i)(IV)) None of the TSLs considered in this notice 
would reduce the utility or performance of the clothes dryers under 
consideration in this rulemaking. DOE considered the possibility that 
room air conditioners size increases (and related weight increases) may 
reduce utility. DOE requested comments from stakeholders during the 
preliminary analysis phase addressing this issue. In response, DOE 
received comments from AHAM recommending limits to product weights and 
from NRDC recommending limits to product dimensions. These comments and 
DOE's response to them are discussed in section IV.C.2.b. DOE adjusted 
its analysis so that analyzed

[[Page 22483]]

TSLs are within the weigh and dimension limits suggested by 
stakeholders. These adjustments included: (1) Use of a 50 lbs. limit 
for the product class 1 analysis, and (2) use of maximum height and 
width dimensions (for all product classes with louvered sides) 
consistent with max-tech available products. DOE made these adjustments 
to its analysis specifically to avoid the possible reduction in 
consumer utility that could result from increases in size and weight. 
Further discussion of this analysis can be found in the direct final 
rule TSD in chapter 5. Furthermore, the energy conservation standards 
are performance standards rather than design standards, so they do not 
specify the design options that manufacturers must use to achieve the 
required efficiency levels. Manufacturers may use design options other 
than those selected by DOE in its analyses to achieve the required 
levels. Consequently, DOE believes that the TSLs considered and the 
TSLs adopted for the energy conservation standard do not represent any 
such consumer utility reductions, notwithstanding increases in size and 
weight that DOE considered in the analyses for some of the product 
classes.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition that is 
likely to result from standards. It also directs the Attorney General 
of the United States (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)(i)(V) 
and (B)(ii)) DOE published a NOPR containing energy conservation 
standards identical to those set forth in today's direct final rule and 
transmitted a copy of today's direct final rule and the accompanying 
TSD to the Attorney General, requesting that the Department of Justice 
(DOJ) provide its determination on this issue. DOE will consider DOJ's 
comments on the rule in determining whether to proceed with the direct 
final rule. DOE will also publish and respond to DOJ's comments in the 
Federal Register in a separate notice.
f. Need for National Energy Conservation
    The energy savings from new or amended standards are likely to 
improve the security and reliability of the nation's energy system. 
Reduced demand for electricity may also 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.
    Energy savings from the proposed standards are also 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 environmental effects from the proposed standards, and 
from each TSL it considered, in the environmental assessment contained 
in chapter 15 in the direct final rule TSD. DOE also reports estimates 
of the economic value of emissions reductions resulting from the 
considered TSLs.
g. 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 be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) 
In developing the direct final rule, DOE has also considered the 
submission of the Joint Petition, which DOE believes sets forth a 
statement by interested persons that are fairly representative of 
relevant points of view (including representatives of manufacturers of 
covered products, States, and efficiency advocates) and contains 
recommendations with respect to an energy conservation standard that 
are in accordance with 42 U.S.C. 6295(o). DOE has encouraged the 
submission of consensus agreements as a way to bring diverse 
stakeholders together, to develop an independent and probative analysis 
useful in DOE standard setting, and to expedite the rulemaking process. 
DOE also believes that standard levels recommended in the consensus 
agreement may increase the likelihood for regulatory compliance, while 
decreasing the risk of litigation.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), 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 of energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the payback period for 
consumers of potential amended energy conservation standards. These 
analyses include, but are not limited to, the 3-year payback period 
contemplated under the rebuttable presumption test. DOE routinely 
conducts, however, an economic analysis that considers the full range 
of impacts to the consumer, manufacturer, nation, and environment, as 
required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis 
serve as the basis for DOE to definitively evaluate 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.12 of this direct final rule and chapter 8 of 
the direct final rule TSD.

IV. Methodology and Discussion

    DOE used two spreadsheet tools to estimate the impact of today's 
proposed standards. The first spreadsheet calculates LCCs and payback 
periods of potential new energy conservation standards. The second 
provides shipments forecasts and then calculates national energy 
savings and net present value impacts of potential energy conservation 
standards. The two spreadsheets are available online at http://www1.eere.energy.gov/buildings/appliance_standards/.
    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 efficiency standards for clothes dryers and room 
air conditioners. 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 (AEO), 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://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
    The version of NEMS used for appliance standards analysis is called 
NEMS-BT, and is based on the AEO version with minor modifications.\26\

[[Page 22484]]

NEMS-BT offers a sophisticated picture of the effect of standards, 
because it accounts for the interactions between the various energy 
supply and demand sectors and the economy as a whole.
---------------------------------------------------------------------------

    \26\ 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

1. General
    When beginning an energy conservation standards rulemaking, DOE 
develops information that provides an overall picture of the market for 
the products concerned, including the purpose of the products, the 
industry structure, and market characteristics.
    This activity includes both quantitative and qualitative 
assessments based on publicly available information. The subjects 
addressed in the market and technology assessment for this rulemaking 
include quantities and types of products sold and offered for sale; 
retail market trends; products covered by the rulemaking; product 
classes and manufacturers; regulatory and non-regulatory programs; and 
technology options that could improve the energy efficiency of the 
product(s) under examination. See chapter 3 of the direct final rule 
TSD for further discussion of the market and technology assessment.
2. Products Included in This Rulemaking
    This subsection addresses the scope of coverage for today's direct 
final rule, discussing whether certain products are subject to the 
amended standards and whether certain technologies provide a viable 
means of improving energy efficiency. In the sections that follow, DOE 
discusses the comments received on the scope of coverage set forth in 
the preliminary analysis.
a. Clothes Dryers
    Hydromatic Technologies Corporation (HTC) suggested that DOE 
consider ``solar'' clothes dryers in this rulemaking. (HTC, No. FDMS 
DRAFT 0068 at p. 3) Under EPCA, any standard for clothes dryers must 
establish either a maximum amount of energy use or a minimum level of 
efficiency based on energy use. (42 U.S.C. 6291(5)-(6)) EPCA defines 
``energy use,'' in part, as ``the quantity of energy'' that the product 
consumes. (42 U.S.C. 6291(4)) EPCA defines ``energy'' as meaning 
``electricity, or fossil fuels,'' or other fuels that DOE adds to the 
definition, by rule, upon determining ``that such inclusion is 
necessary or appropriate to carry out the purposes'' of EPCA. (42 
U.S.C. 6291(3)) DOE has not added solar energy (or any other type of 
fuel) to EPCA's definition of ``energy.'' Thus, DOE currently lacks 
authority to prescribe standards for clothes dryers when they use the 
sun's energy instead of fossil fuels or electricity. DOE also notes 
that it is unaware of any existing clothes dryers that are solar-
powered.
    DOE has also considered in this rulemaking standards based on 
microwave or heat pump technology. EPCA does not define ``clothes 
dryer,'' but DOE's regulations under EPCA provide separate definitions 
for electric and gas products. Because the types of clothes dryers just 
mentioned are or would be electric products, DOE's definition of 
``electric clothes dryer'' is relevant in considering them. DOE defines 
electric clothes dryer as a cabinet-like appliance designed to dry 
fabrics in a tumble-type drum with forced air circulation. The heat 
source is electricity and the drum and blower(s) are driven by an 
electric motor(s). 10 CFR 430.2.
    As to microwave technology, in this rulemaking DOE has considered 
whether microwave drying would be a viable option for improving clothes 
dryer efficiency. DOE determined, however, that this technology did not 
merit further consideration for reasons discussed in section IV.B.1. In 
addition, DOE is unaware of any microwave dryers that are currently 
commercially available for sale in the United States or elsewhere. 
Therefore, in this rulemaking DOE did not consider clothes dryer 
standards based on microwave technology.
    DOE also identified heat pump technology as a possible option for 
improving the energy efficiency of electric clothes dryers. Unlike 
microwave technology, DOE did not screen out this technology from 
further consideration in this rulemaking. Furthermore, DOE determined 
that heat pump clothes dryers are commercially available in Europe and 
Japan. Accordingly, DOE has fully evaluated in this rulemaking whether 
standards based on heat pump technology are warranted for clothes 
dryers.
    DOE also considered non-tumbling (that is, cabinet) clothes dryers. 
DOE notes that, because they do not use a tumbling-type drum, they are 
not currently within DOE's definition of ``electric clothes dryer.'' 10 
CFR 430.2. In analyzing non-tumbling dryers, DOE determined that 
although these clothes dryers are currently on the market in the United 
States, DOE understands that they have a very limited market share. 
Based on a survey of cabinet clothes dryer models available on the U.S. 
market, DOE is aware of only three cabinet clothes dryer models from 
two clothes dryer manufacturers that have very low market share (i.e., 
less than 1 percent) in the conventional tumbling-type clothes dryer 
market. For these reasons, DOE is not considering standards for these 
clothes dryers in this rulemaking.
    DOE also considered centrifugal spinners. DOE notes that, although 
centrifugal spinners remove a certain quantity of moisture from a 
clothes load, they are not within DOE's definition of ``electric 
clothes dryer'' as a product designed to dry fabrics in a tumble-type 
drum with forced air circulation, where the heat source is electricity 
and the drum and blower(s) are driven by an electric motor(s). 10 CFR 
430.2. Such products extract moisture from a clothes load by means of 
centrifugal force at high spin speeds, without the application of 
additional heat. The ECOS report submitted to DOE by NRDC states that 
centrifugal spinners remove 5-14 lbs. of water per kWh of electricity, 
depending on the size and type of load, making them at least two to 
seven times as efficient as a typical electric dryer. The ECOS report 
further cites multiple sources suggesting that mechanical extraction of 
water is 19-70 times more efficient than evaporating it in a typical 
drying process. According to the ECOS report, a centrifugal spinner can 
reduce initial RMC in a clothes load to be dried in a conventional 
clothes dryer from 60-70 percent down to 45 percent. Sources cited in 
the ECOS report variously ascribe to this decrease in initial RMC a 25-
percent reduction in clothes dryer electricity use, or 209 kWh annual 
energy savings for a typical clothes dryer. (NRDC, No. 30 at pp. 10-11) 
Although such centrifugal spinners are currently on the market in the 
United States, DOE understands that they have a very limited market 
share. DOE also notes that it is not aware of any centrifugal spinners 
that can remove moisture from the test load down to 2.5-5 percent RMC, 
as required by the DOE clothes dryer test procedure. In addition, DOE 
is not aware of any clothes dryers currently available on the market or 
prototype designs that incorporate centrifugal spinning and are capable 
of drying the test load to 2.5-5 percent RMC. For these reasons, DOE is 
not considering standards for these clothes dryers in this rulemaking
b. Room Air Conditioners
    DOE defines ``room air conditioner'' under EPCA, in part, as a 
``consumer product * * * which is an encased assembly designed as a 
unit for mounting in a window or through the wall for the purpose of 
providing

[[Page 22485]]

delivery of conditioned air to an enclosed space. It includes a prime 
source of refrigeration and may include a means for ventilating and 
heating.'' 10 CFR 430.2. A product known as a ``portable air 
conditioner'' has most of these characteristics. However, it rests on 
the floor, often on wheels, with a short ducted connection to a window 
or other access to the outside to vent warm condenser air and, for some 
of these products, to provide condenser cooling air from the outside. 
DOE notes that portable air conditioners are not within the current DOE 
definition of ``room air conditioner'' because they are not designed 
``for mounting in a window or through the wall.'' 10 CFR 430.2
    DOE notes that EPCA authorizes the prescription of standards for 
room air conditioners (42 U.S.C. 6292(2)), and that portable air 
conditioners do not fall within DOE's regulatory definition of room air 
conditioner at 10 CFR 430.2, as stated above, or the definitions found 
in the current industry standards ANSI/AHAM RAC-1-2008 and ANSI/ASHRAE 
Standard 16-1983 (RA 2009).\27\ DOE also notes that portable air 
conditioners cannot be tested in the window configuration used in the 
referenced standard ANSI/ASHRAE Standard 16-1983 (RA 2009), in the 
amended test procedure. 76 FR 972, 978 (January 6, 2011). DOE believes 
that a separate test procedure analysis would need to be considered for 
these products; as an example, DOE notes that the ANSI/ASHRAE test 
procedure standard for portable air conditioners (ANSI/ASHRAE Standard 
128-2001, ``Method of Rating Unitary Spot Air Conditioners'') 
references the ANSI/ASHRAE Standard 37-2005 ``Methods of Testing for 
Rating Unitary Air-Conditioning and Heat Pump Equipment'' for testing, 
and excludes equipment covered by ANSI/AHAM RAC-1 2008. Thus, DOE is 
not considering standards for portable air conditioners in this 
rulemaking. DOE may, however, consider standard for portable air 
conditioners in a future rulemaking.
---------------------------------------------------------------------------

    \27\ EPCA also authorizes the classification of additional 
consumer products as covered products pursuant to 42 U.S.C. 6292(b) 
provided that certain criteria are met.
---------------------------------------------------------------------------

3. Product Classes
    In evaluating and establishing energy conservation standards, DOE 
divides covered products into classes by the type of energy used, or by 
capacity or other performance-related feature that justifies a 
different standard for products having such feature. (See 42 U.S.C. 
6295(q)) In determining whether a feature justifies a different 
standard, DOE must consider factors such as the utility of the feature 
to users. Id. DOE is required to establish different energy 
conservation standards for different product classes based on these 
criteria.
a. Clothes Dryers
    In the preliminary analysis, DOE proposed to analyze six product 
classes for residential clothes dryers (for details on these product 
classes, see chapter 3 of the preliminary TSD). In particular, DOE 
considered four product classes for vented clothes dryers and two 
product classes for ventless clothes dryers, ventless electric compact 
(240 V) and combination washer/dryers, recognizing the unique utility 
that ventless clothes dryers offer to consumers.\28\
---------------------------------------------------------------------------

    \28\ Previously, DOE has described ventless dryers as condensing 
dryers. The new designation reflects the actual consumer utility 
(that is, no external vent required) and the market availability of 
vented dryers that also condense.
---------------------------------------------------------------------------

    AHAM, BSH, and Whirlpool suggested that DOE consider an additional 
product class for electric standard-size ventless clothes dryers, even 
though such products are not currently on the market in the United 
States, to prepare for likely market entry. AHAM stated that a 
standard-size ventless product class would decrease the request for 
waivers that DOE may receive in the near future. AHAM further commented 
that the analysis for a standard-size ventless product class could be 
extrapolated from the analysis for compact-size ventless clothes 
dryers. (AHAM, Public Meeting Transcript, No. 21.4 at pp. 19-20; AHAM, 
No. 25 at pp. 4-5; BSH, No. 23 at p. 3; Whirlpool, No. 22 at p. 1)
    Because DOE is unaware of any standard-size ventless clothes dryers 
currently on the market, as discussed in section IV.A.2.a, and because 
DOE does not have information on the performance of standard-size 
ventless clothes dryers that would warrant the definition of a separate 
product class, DOE is not establishing a product class for standard-
size ventless clothes dryers in today's direct final rule.
    According to BSH, clothes dryers should be classified as vented, 
ventless, and gas product classes, without differentiation by drum 
size. (BSH, No. 23 at p. 4) EPCA requires DOE to specify a level of 
energy use or efficiency different from that which applies to the type 
of covered product for any group of such products that have a capacity 
or other performance-related feature that justifies a different 
standard. DOE has previously determined, and has verified in recent 
testing, that compact-size clothes dryers have inherently different 
energy consumption than standard-size clothes dryers. DOE also notes 
that compact-size clothes dryers provide utility to consumers by 
allowing for installation in space-constrained environments. Therefore, 
DOE has determined that the capacity and utility of compact clothes 
dryers justifies a different standard and establishes separate product 
classes for compact clothes washers under EPCA. (42 U.S.C. 6295(q))
b. Room Air Conditioners
    The 1997 final rule for room air conditioners established standards 
for 16 product classes based on the following characteristics: 
Capacity, presence or absence of louvered-sides (louvered-side products 
are intended for installation in windows, while products without 
louvered sides are for through-the-wall installation), type of cabinet 
(casement-only, casement-slider, and other), and presence or absence of 
heat pump mode for heating. 72 FR 50122 (Sept. 24, 1997).
    In its preliminary analysis, DOE proposed no changes to the 
existing product class structure. DOE received two comments addressing 
product classes, as discussed below.
    AHAM recommended that DOE consider splitting the following two 
product classes: Product class 5 (room air conditioners without reverse 
cycle, with louvered sides, and capacity 20,000 Btu/h or more) and 
product class 8 (room air conditioners without reverse cycle, without 
louvered sides, and capacity 8,000 to 13,999 Btu/h) (AHAM, No. 25 at p. 
6). AHAM recommended that product class 5 be split into two product 
classes, (1) from 20,000 Btu/h to 24,999 Btu/h, and (2) greater than 
25,000 Btu/h. AHAM also recommended that product class 8 be split into 
two product classes, (1) 8,000 Btu/h to 10,999 Btu/h, and (2) 11,000 
Btu/h to 13,999 Btu/h. AHAM stated that manufacturers are reaching the 
limit of achievable efficiency levels for higher-capacity room air 
conditioners. Id.
    The Joint Comment also proposed splitting both product classes 5 
and 8, but recommended a different capacity at which to split product 
class 5. The Joint Comment proposed that the new product classes 
derived from the current product class 5 be (1) from 20,000 Btu/h to 
27,999 Btu/h, and (2) 28,000 Btu/h and greater. The Joint Comment 
proposed the same two separated product classes for product class 8 
that AHAM proposed. (Joint Comment, No. 31 at pp. 7-8)
    DOE agrees with the recommendations of AHAM and the

[[Page 22486]]

Joint Comment that the new product classes are needed to ensure 
establishment of meaningful efficiency levels over the full range of 
capacities. This is discussed in detail in the following sections which 
separately address each of the product class splits.

Splitting of Product Class 5

    DOE splits current product class 5 (room air conditioners without 
reverse cycle, with louvered sides, and capacity 20,000 Btu/h or more) 
into two new product classes: 5A (room air conditioners without reverse 
cycle, with louvered sides, and capacity from 20,000 Btu/h to 27,999 
Btu/h) and 5B (room air conditioners without reverse cycle, with 
louvered sides, and capacity 28,000 Btu/h or more). This step is 
consistent with the recommendations of AHAM and the Joint Comment 
recommendations to split the product class, but uses the split 
recommended by the Joint Comment.
    DOE made this decision based on the following input:
    <bullet> Discussions with individual manufacturers of the 
efficiency options available to large room air conditioners.
    <bullet> Research on available product sizes and available product 
efficiencies.
    <bullet> Reverse engineering of two product class 5 units, 
including a 28,500 Btu/h unit.
    <bullet> Engineering analysis of R-410A product class 5 baseline 
products at two capacity levels (24,000 Btu/h and 28,000 Btu/h).
    Max-tech available EER for product classes 1 through 5 (room air 
conditioners without reverse cycle, with louvered sides, covering the 
full capacity range of available products) for products using R-410A 
refrigerant are shown in Table IV.1 below. The max-tech EER drops 
gradually as capacity increases above 6,000 Btu/h, but drops 
significantly above 28,000 Btu/h.

       Table IV.1--Max-Tech Louvered R-410A Room Air Conditioners
------------------------------------------------------------------------
   Room air conditioner R-410A louvered products (market max available
                                 levels)
-------------------------------------------------------------------------
                                                                 Max
                 Product class                    Capacity    available
                                                                 EER
------------------------------------------------------------------------
1.............................................        5,200         11.0
1.............................................        5,500         11.2
2.............................................        6,000         12.0
2.............................................        7,900         11.7
3.............................................       11,700         11.4
4.............................................       18,000         10.7
5.............................................       20,800         10.0
5.............................................       27,800          9.7
5.............................................       36,000          8.5
------------------------------------------------------------------------

    DOE produced cost-efficiency curves for product class 5 products at 
both 24,000 Btu/h and 28,000 Btu/h capacity levels. Table IV.2 shows 
the results of these analyses, which clearly show (1) much steeper 
increase in cost as the CEER increases and (2) significantly lower max-
tech for the larger capacity products. This analysis demonstrates the 
much greater potential for efficiency improvement for the lower-
capacity products.

         Table IV.2--Comparison of 24,000 Btu/h and 28,000 Btu/h Room Air Conditioner Incremental Costs
----------------------------------------------------------------------------------------------------------------
                                                        PC5A--24,000 Btu/h              PC5B--28,000 Btu/h
                                                 ---------------------------------------------------------------
                Efficiency level                                    Incremental                     Incremental
                                                       CEER            cost            CEER            cost
----------------------------------------------------------------------------------------------------------------
1...............................................            8.47           $0.00            8.48           $0.00
2...............................................             9.0            8.85             9.0           23.52
3...............................................             9.4           19.04             9.4           50.27
4...............................................             9.8           50.66             9.8          229.01
5...............................................           10.15          204.62  ..............  ..............
----------------------------------------------------------------------------------------------------------------

    The cost-efficiency analysis and the market analysis demonstrate 
that limitations in the max-tech levels for product class 5 units occur 
at the 28,000 Btu/h capacity, rather than the 24,000 Btu/h capacity. 
DOE used these analyses to determine that the 28,000 Btu/h capacity 
split was more appropriate than the 24,000 Btu/h split.
    DOE's decision to establish the new product classes 5A and 5B that 
take the place of the current product class 5, and split the product 
class at the 28,000 Btu/h capacity level, is based on the stakeholder 
comments and DOE's analysis. Additional details of the analysis can be 
found in chapter 3 of the direct final rule TSD.

Splitting of Product Class 8

    DOE splits product class 8 (room air conditioners without reverse 
cycle, without louvered sides, and capacity 8,000 to 13,999 Btu/h) to 
establish two new product classes: 8A (room air conditioners without 
reverse cycle, without louvered sides, and capacity 8,000 to 10,999 
Btu/h) and 8B (room air conditioners without reverse cycle, without 
louvered sides, and capacity 11,000 to 13,999 Btu/h).
    DOE based this split on information similar to that of the decision 
to split product class 5, as discussed above. DOE focused its reverse 
engineering and engineering for these product classes on capacities of 
8,000 Btu/h and 12,000 Btu/h.
    The max-tech EERs of available room air conditioners without 
louvered sides using R-410A refrigerant are dependent on capacity 
range. These products are designed to fit in sleeves installed in the 
building wall. Due to the dependence of this market on replacement 
sales, as reported by manufacturers during interviews for the final 
rule analysis, there is little opportunity to adjust the physical size 
of the product. (This is in contrast to products with louvered sides, 
designed to fit in windows, which allows more flexibility for size 
increase to improve efficiency.) Non-louvered products with capacity 
greater than 12,600 Btu/h are unable to meet the current ENERGY STAR 
EER level. DOE further notes that non-louvered ENERGY STAR products in 
the capacity range 11,500 to 12,800 Btu/h require oversized sleeves. At 
a slightly higher capacity level, these products cannot be designed to 
meet the DOE energy standard--the available data show that there are 
currently no available non-louvered products having greater than 13,999 
Btu/h capacity.
    DOE produced cost-efficiency curves for non-louvered R-410A room 
air conditioners at 8,000 Btu/h and 12,000 Btu/h capacities, shown in 
Table IV.3 below. As for the product class 5 analyses, the results show 
the significantly steeper increase in cost as efficiency level is 
raised above the

[[Page 22487]]

baseline and the reduced max-tech level for the higher-capacity 
product.

          Table IV.3--Comparison of 8,000 Btu/h and 12,000 Btu/h Room Air Conditioner Incremental Costs
----------------------------------------------------------------------------------------------------------------
                                                         PC8A--8,000 Btu/h              PC8B--12,000 Btu/h
                                                 ---------------------------------------------------------------
                Efficiency level                                    Incremental                     Incremental
                                                       CEER            cost            CEER            cost
----------------------------------------------------------------------------------------------------------------
1...............................................            8.41           $0.00            8.44           $0.00
2...............................................            9.3             4.61            9.3            11.72
3...............................................            9.6             6.68            9.5            15.39
4...............................................           10.0            16.63            9.8            26.06
5...............................................           10.4            88.45           10.0            93.36
----------------------------------------------------------------------------------------------------------------

    DOE's decision to establish the new product classes 8A and 8B that 
take the place of the current product class 8 is based on the 
stakeholder comments and DOE's analysis. DOE has decided to split the 
product class at the 11,000 Btu/h capacity level recommended by both 
AHAM and the Joint Comment. Additional details of the analysis can be 
found in chapter 3 of the direct final rule TSD.

Product Class Summary

    Table IV.4 below presents the product classes established in this 
rulemaking, including both current and classes established in this 
rulemaking.

        Table IV.4--Proposed Room Air Conditioner Product Classes
------------------------------------------------------------------------
                 Number                           Product class
------------------------------------------------------------------------
                        Classes Listed in the CFR
------------------------------------------------------------------------
1......................................  Without reverse cycle, with
                                          louvered sides, and less than
                                          6,000 Btu/h.
2......................................  Without reverse cycle, with
                                          louvered sides, and 6,000 to
                                          7,999 Btu/h.
3......................................  Without reverse cycle, with
                                          louvered sides, and 8,000 to
                                          13,999 Btu/h.
4......................................  Without reverse cycle, with
                                          louvered sides, and 14,000 to
                                          19,999 Btu/h.
6......................................  Without reverse cycle, without
                                          louvered sides, and less than
                                          6,000 Btu/h.
7......................................  Without reverse cycle, without
                                          louvered sides, and 6,000 to
                                          7,999 Btu/h.
9......................................  Without reverse cycle, without
                                          louvered sides, and 14,000 to
                                          19,999 Btu/h.
10.....................................  Without reverse cycle, without
                                          louvered sides, and 20,000 Btu/
                                          h or more.
11.....................................  With reverse cycle, with
                                          louvered sides, and less than
                                          20,000 Btu/h.
12.....................................  With reverse cycle, without
                                          louvered sides, and less than
                                          14,000 Btu/h.
13.....................................  With reverse cycle, with
                                          louvered sides, and 20,000 Btu/
                                          h or more.
14.....................................  With reverse cycle, without
                                          louvered sides, and 14,000 Btu/
                                          h or more.
15.....................................  Casement-Only.
16.....................................  Casement-Slider.
------------------------------------------------------------------------
             Product Classes Established in This Rulemaking
------------------------------------------------------------------------
5A.....................................  Without reverse cycle, with
                                          louvered sides, and 20,000 Btu/
                                          h to 27,999 Btu/h.
5B.....................................  Without reverse cycle, with
                                          louvered sides, and 28,000 Btu/
                                          h or more.
8A.....................................  Without reverse cycle, without
                                          louvered sides, and 8,000 to
                                          10,999 Btu/h.
8B.....................................  Without reverse cycle, without
                                          louvered sides, and 11,000 to
                                          13,999 Btu/h.
------------------------------------------------------------------------

    EPCA requires that the establishment of separate product classes be 
based on either (A) consumption of a different kind of energy from that 
consumed by other covered products within such type (or class); or (B) 
a capacity or other performance-related feature which other products 
within such type (or class) do not have, where such feature justifies a 
higher or lower standard from that which applies to other products 
within such type (or class). (42 U.S.C. 6295(q)). The second of these 
criteria is applicable to the new product classes proposed in this 
rulemaking, because the new product classes are based on product 
capacity. The justification of different standards for the new product 
classes of different capacities is discussed above in this section.
4. Non-Regulatory Programs
    DOE's market assessment provides a profile of the residential 
clothes dryer and room air conditioner industries in the United States. 
As part of the market and technology assessment, DOE reviews non-
regulatory programs promoting energy-efficient residential appliances 
in the United States. Non-regulatory programs that DOE considers in its 
market and technology assessment include ENERGY STAR, a voluntary 
labeling program jointly administered by the U.S. Environmental 
Protection Agency (EPA) and DOE. ENERGY STAR identifies energy 
efficient products through a qualification process.\29\ To qualify, a 
product must exceed Federal minimum standards by a specified amount, or 
if no Federal standard exists, exhibit select energy-saving features. 
ENERGY STAR specifications currently exist for room air conditioners, 
but not for residential clothes dryers.
---------------------------------------------------------------------------

    \29\ For more information, please visit http://www.energystar.gov.
---------------------------------------------------------------------------

    BSH commented that it would support ENERGY STAR qualification for 
clothes dryers, as well as an energy label system that would help 
consumers purchase the most efficient models on the market. According 
to BSH, the European labeling system for clothes dryers has resulted in 
benefits to

[[Page 22488]]

consumers, manufacturers, and the environment. (BSH, No. 23 at pp. 2, 
6) The California Utilities commented that a revised test procedure 
could better differentiate clothes dryer models in terms of energy 
performance, facilitating an ENERGY STAR program. According to the 
California Utilities, there is currently no ENERGY STAR program because 
clothes dryers do not differ in apparent energy use as measured by the 
existing clothes dryer test procedure. (California Utilities, No. 31 at 
p. 6).
    DOE notes that, according to the joint program between the EPA and 
DOE, the EPA determines whether to add qualification specifications for 
newly covered products within ENERGY STAR. DOE encourages the 
implementation of ENERGY STAR specifications and labeling as a means to 
achieve national energy savings, and would assist the EPA in applying 
the DOE clothes dryer test procedure to evaluate qualifying products in 
any future ENERGY STAR ratings for clothes dryers.
    Energy labeling for clothes dryers under the EnergyGuide program is 
regulated by the FTC. (10 CFR 305) Although DOE does not have the 
authority under EPCA to revise the regulations for energy labeling to 
include clothes dryers, DOE would provide technical information to the 
FTC to support any new EnergyGuide labeling requirement for these 
products.
5. Technology Options
    As part of the market and technology assessment, DOE develops a 
list of technologies for consideration for improving the efficiency of 
clothes dryers and room air conditioners. Initially, these technologies 
encompass all those DOE believes are technologically feasible (the 
first of the four criteria in the screening analysis). Chapter 3 of the 
preliminary TSD includes the detailed list of all technology options 
identified for clothes dryers and room air conditioners. DOE received 
several comments in response to the technologies proposed in the 
preliminary analysis to be analyzed for clothes dryers and room air 
conditioners.
a. Clothes Dryers

Heat Pump Clothes Dryers

    DOE notes that heat pump clothes dryers function by recirculating 
the exhaust air back to the dryer while moisture is removed by a 
refrigeration-dehumidification system. The warm and damp exhaust air of 
the dryer enters the evaporation coil of the dehumidifier where it 
cools down below the dew point, and sensible and latent heat are 
extracted. The heat is transferred to the condenser coil by the 
refrigerant and reabsorbed by the air, which is moving in a closed air 
cycle. DOE notes that there are no heat pump dryers currently available 
on the U.S. market, but that heat pump clothes dryers are available on 
the market in Europe.
    BSH commented that it foresees the heat pump clothes dryer as an 
innovative technology breakthrough for improved efficiency in the next 
few years in North America. BSH noted that in Europe in the last 2 
years the market share for heat pump clothes dryers has increased from 
3 to 11 percent, and that this success is based on four key factors: 
(1) European energy consumption values are comparable for all sizes of 
clothes dryers because they are independent of drum size; (2) the 
percent range between energy classes in Europe (A = best, B, C * * *) 
\30\ remains constant, so one energy classification is not 
proportionally larger than another; (3) realistic load quantities are 
used for testing; and (4) automatic termination control dryers are 
standard and are given preferential treatment over timer dryers (which 
tend to over dry and use more energy). (BSH, No. 23 at p. 2)
---------------------------------------------------------------------------

    \30\ The European energy label system uses a letter scale from 
``A'' to ``G'' to rate the efficiency and performance of certain 
appliance products. A rating of ``A'' denotes the highest efficiency 
unit, whereas a rating of ``G'' denotes the lowest efficiency unit.
---------------------------------------------------------------------------

    In the context of the energy conservation standards rulemaking, DOE 
conducts its analysis to determine an economically justified minimum 
efficiency standard. DOE notes that the efficiency levels proposed in 
the preliminary analyses are not used for product marketing 
classification as they are in the European energy label system. As a 
result, DOE does not intend to create an energy class system as part of 
the energy conservation standard rulemaking. As discussed in section 
III.A.1.d, DOE also notes that its clothes dryer test procedure 
specifies a single test load size for standard-size clothes dryers and 
a single test load size for compact-size clothes dryers. In response to 
BSH's comments regarding realistic load quantities, DOE also notes that 
it amended the clothes dryer test procedure to revise the test load 
size for standard-size clothes dryers to be more representative of 
current consumer usage habits, as discussed in the TP Final Rule. 76 FR 
972, 977 (January 6, 2011). Also, as discussed above in section 
III.A.1.b, DOE did not amend the test procedure in the TP Final Rule to 
better account for automatic cycle termination. DOE notes that the 
clothes dryer test procedure provides a field use factor for automatic 
termination control dryers and a different field use factor for timer 
dryers. As discussed above, DOE notes that heat pump clothes dryers are 
available on the market in Europe. DOE also notes that multiple clothes 
dryer manufacturers that manufacture heat pump clothes dryers for the 
international markets also manufacture clothes dryers for the United 
States. For these reasons, DOE believes that heat pump technology is 
technologically feasible and therefore considered heat pump clothes 
dryers for the engineering analysis.

Heat Recovery

    For this technology option, a heat exchanger is used to recover 
exhaust heat energy and to preheat inlet air. Based on research of this 
technology and discussions with manufacturers, this system is feasible 
for both gas and electric dryers because none of the exhaust air re-
enters the dryer. Energy savings are achieved either by using the 
additional recovered heat to increase the temperature of the air 
entering the drum and thus reduce the drying time or by using the 
additional recovered heat to reduce the required heater input power, 
depending on how the system is implemented. As reported in chapter 3 of 
the preliminary TSD, estimated energy savings from several researchers 
range from 2 to 6 percent in non-condensing mode.
    The California Utilities and NRDC commented that the energy savings 
associated with heat recovery would be significantly higher. According 
to the California Utilities, 80-percent efficient counter-flow heat 
exchangers are widely available, while 90-percent efficient heat 
exchangers are technically feasible. The California Utilities estimate 
energy savings for heat recovery to be about 30 percent for electric 
clothes dryers and 20 percent for gas clothes dryers. The California 
Utilities noted that ventless dryers are available in the United States 
and are common in Europe, suggesting that heat recovery is both 
technically feasible and practical to manufacture (California 
Utilities, No. 31 at pp. 6-7, 12, 21) The California Utilities stated 
that the technologies behind heat recovery and ventless clothes dryers 
differ only in where the air from the heat exchanger is routed. In 
ventless clothes dryers, cooled exhaust air is channeled to the heater 
to be reused and the warmed room air is vented back to the room. For 
heat recovery, these are reversed, such that cooled exhaust air is 
vented (usually outside) and the warmed room air is channeled into the 
heater. (California Utilities, No. 31 at p. 6) The California Utilities 
provided a

[[Page 22489]]

specific example of a dryer with an EF of 3.10, or 2.26 kWh per cycle, 
which is stopped at the end of the bulk drying stage. The clothes dryer 
in this example is assumed to have an average exhaust temperature of 
110 [deg]F, or 40 [deg]F above ambient temperature. According to the 
California Utilities, a 90-percent efficient counter-flow heat 
exchanger would preheat the incoming air by 36 [deg]F, which would 
result in 0.684 kWh directly replacing heat that would otherwise be 
supplied by the electric resistance heater. The replaced heat would 
correspond to 1.58 kWh per cycle to dry the 7-lb. test load and an EF 
of 4.43. This would result in a 30-percent energy savings due to heat 
recovery. Id. According to NRDC, as stated in the ECOS report, 40-
percent energy savings (1.348 kWh of heater energy savings per cycle) 
can be achieved for a load of cotton towels with a 90-percent efficient 
air-to-air cross-flow heat exchanger between the exhaust and intake of 
the clothes dryer. (NRDC, No. 30 at p. 27)
    DOE is not aware of any data indicating that a cross-flow heat 
exchanger may be used in a clothes dryer application and achieve 80-
percent or 90-percent efficiency. DOE notes that an air-to-air heat 
exchanger used in a clothes dryer must have sufficient fin spacing to 
prevent lint fouling of the heat exchanger. DOE also notes that the 
ECOS report does not provide details of how the potential energy 
savings associated with heat recovery were calculated (that is, data 
for airflow, temperature, specific heat, and similar items). DOE notes 
that the California Utilities comment stated that, for an exhaust 
temperature of 110 [deg]F and a 90-percent efficient cross-flow heat 
exchanger, the energy savings would be approximately 0.684 kWh per 
cycle. However, the ECOS report estimated that the energy savings would 
be 1.348 kWh for what appear to be the same conditions. Because the 
details of how these estimates were calculated were not provided, DOE 
is unable to verify the energy savings suggested by the commenters 
would occur.
    DOE also notes that it is unclear whether the estimates provided by 
the California Utilities and the ECOS report for heat recovery 
considered condensation in the exhaust air stream. Manufacturers 
indicated that such heat recovery systems must be designed to prevent 
condensation in the exhaust ducting, and as a result, there is a limit 
to the amount of heat that can be recovered.
    DOE notes that it has revised the cost-efficiency analysis from the 
preliminary analyses based on its analysis and discussions with 
manufacturers. As discussed in section IV.C.2, inlet air preheating 
(that is, heat recovery) is considered applicable to the maximum-
available efficiency levels for vented clothes dryer product classes, 
and DOE estimates this technology option would provide roughly a 6-7 
percent improvement in efficiency. Manufacturers confirmed during 
interviews with DOE that this efficiency improvement accurately 
estimates the energy savings potential associated with inlet-air 
preheating in real-world applications, considering such factors as 
condensation in the exhaust airstream and lint accumulation in the heat 
exchanger.

Hydronic Heating

    HTC requested that DOE consider its ``hydronically heated'' clothes 
dryer, which uses a self-contained hydronic heating system, as a 
technology option. According to HTC, this technology currently exists, 
but products incorporating such a design are not yet being sold pending 
HTC's resolution of licensing and private labeling considerations. 
(HTC, No. FDMS DRAFT 0068 at p. 3) DOE is also aware of HTC's stand-
alone hydronic heater that could be implemented as a clothes dryer heat 
source, utilizing water or other heat transfer fluids and an immersion 
element similar to a water heater. The heated fluid would then pass 
through a heat exchanger, where the heat would be transferred to the 
air entering the drum and then pumped back to the hydronic heater. 
Because DOE has not been able to identify any clothes dryers with such 
hydronic heating systems currently on the market, however, DOE is 
unable to evaluate the energy consumption associated with a clothes 
dryer equipped with a stand-alone hydronic heating device and thus has 
not included it as a design option in today's direct final rule.

Improved Cycle Termination

    According to NRDC, the test results in the ECOS report show that a 
clothes dryer equipped with improved automatic cycle termination saves 
0.76 kWh per load compared to a clothes dryer with electromechanical 
controls. (NRDC, Public Meeting Transcript, No. 21.4 at p. 42) The 
California Utilities noted that ``high performance'' automatic cycle 
termination controls are already available in dryers on the market that 
produce energy savings on the order of 10-percent or more above current 
energy use, although DOE's clothes dryer test procedure must be amended 
to measure this improvement. The California Utilities strongly urged 
DOE to analyze this technology option.
    For the reasons described in section III.A.1.b, DOE did not adopt 
in the TP Final Rule the amendments for measuring automatic cycle 
termination proposed in the TP SNOPR. Therefore, DOE did not analyze 
this technology option further.

Modulating Heat

    The NRDC/ECOS report stated that if a conventional gas clothes 
dryer is improved with modulating burner technology, the performance of 
the clothes dryer would be roughly equivalent to or superior to many 
heat pump clothes dryers in terms of CO<INF>2</INF> emissions, source 
energy use, and energy cost. This performance would be achieved while 
also offering faster drying times and lower initial purchase price. 
(NRDC, No. 30 at pp. 37-38) DOE notes that heat pump technology is 
applicable only to electric clothes dryers, for which DOE maintains a 
product class distinction from gas clothes dryers. DOE analyzed 
technologies currently available on the market and concluded that two-
stage gas burner modulation is necessary to achieve max-tech 
performance. Because DOE is not aware of any gas clothes dryers with 
fully modulating burner systems currently on the market, DOE did not 
consider this technology further in developing the standards set forth 
in today's direct final rule. DOE does include this technology as a 
longer-term means to achieve energy efficiency improvements in a 
sensitivity analysis described in chapter 16 of the direct final rule 
TSD.

Outdoor Intake Air

    The California Utilities and NRDC suggested that DOE consider as a 
technology option those technologies that draw intake air for the 
clothes dryer from outside the residence, thereby reducing space 
conditioning loads in the home. (California Utilities, No. 31 at p. 8; 
NRDC, Public Meeting Transcript, No. 21.4 at p. 44) The California 
Utilities further suggest that such a technology option may be 
necessitated by the trend in residential new construction towards 
tighter building envelopes. Tighter envelopes result in reduced exhaust 
airflow from the clothes dryer and greater depressurization impacts, 
which can potentially result in indoor air quality problems. According 
to the California Utilities, the HVAC load is proportional to the 
amount of air vented from the clothes dryer, but this load can be 
reduced or eliminated by reducing the total air drawn through the dryer 
or by having a separate outside air intake and vent. The California 
Utilities estimate

[[Page 22490]]

energy savings due to reductions in HVAC load on the order of 10 
percent or more. (California Utilities, No. 31 at pp. 2, 8-9) The NRDC/
ECOS report states that outdoor intake air could save about 1 kWh per 
load, but that without heat recovery this technology option would only 
be advantageous in the summer. The NRDC/ECOS report adds that with heat 
recovery outdoor intake air is advantageous year-round. (NRDC, No. 30 
at pp. 27-28).
    As discussed in section III.A.1.f, EPCA requires that any test 
procedures prescribed or amended under this section shall be reasonably 
designed to produce test results which measure energy efficiency, 
energy use, water use, or estimated annual operating cost of a covered 
product during a representative average use cycle or period of use. (42 
U.S.C. 6293(b)(3)) DOE believes that accounting for the effects of 
clothes dryers on HVAC energy use is inconsistent with this 
requirement. Therefore, DOE did not revise the clothes dryer test 
procedure to account for HVAC energy use in the TP Final Rule, and does 
not consider outdoor intake air as an additional technology option.

Reverse Tumble

    NRDC commented that the use of synthetic mixed fabric in the DOE 
clothes dryer test procedure may be underestimating the efficiency 
improvement associated with reverse tumble. NRDC stated that cotton and 
other natural fabrics tend to ball up when rotated continuously in one 
direction, and therefore the test procedure is underestimating the 
potential benefit of reverse tumble. (NRDC, Public Meeting Transcript, 
No. 21.4 at pp. 42-43) As discussed in section III.A.1.d, DOE is 
unaware of data to determine the composition of clothing types and 
materials that would produce results as repeatable as those resulting 
from use of the current test cloth. Therefore, DOE did not amend the 
clothes dryer test procedure in the TP Final Rule to change the test 
load composition. In the absence of comments providing information on 
the efficacy of reverse tumble for the existing DOE test cloth, DOE 
continues to believe that no measurable energy savings are associated 
with this technology option.

Switch Mode Power Supply

    ACEEE stated that the technology to reduce standby power 
consumption to less than 1 W, via switch mode power supply controllers, 
is widely available at low cost. (ACEEE, No. 24 at p. 2) NRDC stated 
that the ECOS report found standby power levels in the range of 0.03 to 
0.05 W with switch mode power supply controllers, corresponding to 
energy consumption of 4-6 kWh over the lifetime of the clothes dryer. 
(NRDC, No. 26 at p. 3; NRDC, No. 30 at p. 5) DOE has observed that 
switching power supplies offer the highest conversion efficiencies (up 
to 75 percent) and lowest no-load standby losses (0.2 W or less), 
though at a higher cost, higher part count, and greater complexity than 
conventional linear power supplies. DOE noted, however, that switch 
mode power supplies are incorporated in many clothes dryers currently 
on the market, and thus has included switch mode power supplies in its 
analysis for today's direct final rule.

Vent Selector Switch

    The NRDC/ECOS report suggested as an additional technology option 
the incorporation of a ``summer/winter'' selector so that the waste 
heat would be delivered to the building during the winter instead of 
being vented outside. According to the ECOS report, 60 percent of the 
energy used by the clothes dryer evaporates water from the clothes load 
and the other 40 percent is available as waste heat to the room. (NRDC, 
No. 30 at p. 28) For the reasons discussed in section III.A.1.f, DOE 
did not consider the energy impacts on the space conditioning 
requirements in amending its clothes dryer test procedure, and thus did 
not evaluate this technology further.
b. Room Air Conditioners
    DOE received comments from several interested parties recommending 
that DOE also consider the following technologies: Alternative 
refrigerants, suction line heat exchangers (SLHX), flooded evaporator 
coils, and automatic timers.
    AHAM commented that it had no additional design option suggestions 
for room air conditioners, and that many of the design options proposed 
and initially evaluated by DOE are already employed by a number of 
manufacturers to increase the efficiency of today's products (AHAM, No. 
25 at p. 4).

Alternative Refrigerants

    DOE notes that HCFC-22 was traditionally the refrigerant used in 
room air conditioners. On December 15, 2009, the EPA issued a final 
rule banning the sale and distribution of air-conditioning and 
refrigeration appliances containing HCFC-22, applying to appliances and 
components manufactured on or after January 1, 2010. 74 FR 66412, 
66418.
    During individual manufacturer interviews conducted for the 
preliminary analysis, manufacturers revealed that the room air 
conditioning industry was transitioning to using R-410A refrigerant. 
DOE also discussed the transition with compressor manufacturers, who 
were developing and manufacturing R-410A rotary compressors for use in 
room air conditioners.
    Because of the phaseout of HCFC-22 and the transition to R-410A, 
DOE conducted the analysis for today's direct final rule based on use 
of R-410A refrigerant. DOE's analysis of R-410A room air conditioners 
is presented in chapter 5 of the direct final rule TSD.
    A number of commenters urged DOE to consider alternative 
refrigerants as a technology option in the screening process. Both 
ACEEE and the California Utilities suggested that DOE consider 
hydrocarbon refrigerants possible alternatives to R-410A. (ACEEE, No. 
24 at p. 4; California Utilities, No. 31 at p. 16) The California 
Utilities also suggested that DOE consider R-407C. (California 
Utilities, No. 31 at p. 16) NPCC supported consideration of alternative 
refrigerants as well. (NPCC, No. 32 at p. 4)
    DOE notes that no hydrocarbon refrigerants are currently included 
as acceptable for use in air-conditioning applications by the EPA 
Significant New Alternatives Policy (SNAP) Program list. This program 
was established to identify acceptable alternatives to ozone-depleting 
substances used in a variety of applications.\31\ The list identifies 
allowed applications for use of the alternative substances. Since there 
have been no hydrocarbons included on the SNAP list as acceptable for 
use in air conditioning appliances, DOE did not consider these 
alternative refrigerants in its analysis.
---------------------------------------------------------------------------

    \31\ See the SNAP program Web site at http://www.epa.gov/ozone/snap/.
---------------------------------------------------------------------------

    R-407C, on the other hand, is approved as an acceptable substitute 
for use in air-conditioning equipment, which includes room air 
conditioners. DOE analyzed R-407C to determine whether it offers 
efficiency improvement over R-410A, using the energy model developed 
and used throughout the engineering analysis. The results indicate that 
the efficiency of R-407C is less than that of R-410A for room air 
conditioners operating at rating conditions. As a result, DOE 
determined that use of R-407C refrigerant is not a viable design 
option. Additional details of this analysis are

[[Page 22491]]

presented in chapter 3 of the direct final rule TSD.
    DOE also performed research to identify other potential alternative 
refrigerants during the preliminary analysis, but was unable to 
identify viable alternative refrigerants to R-410A. The research 
included a review of air-conditioning products, academic articles, 
industry publications, and interviews with component vendors. DOE 
sought to include refrigerants that were approved by the EPA for use in 
room air conditioners. For more detail, see chapter 3 of the direct 
final rule TSD.

Suction Line Heat Exchangers

    An SLHX transfers heat between the high-temperature liquid 
refrigerant leaving the condenser and the low-temperature vaporized 
refrigerant leaving the evaporator. The heat exchanger lowers the 
outgoing temperature of the liquid refrigerant and raises the 
temperature of the outgoing vapor refrigerant. This heat transfer 
allows for the liquid refrigerant to be subcooled before entering the 
expansion device and offers the potential to increase the vapor-
compression cycle's cooling capacity.
    The California Utilities and NPCC argued that DOE should consider 
SLHXs based on possible performance improvements (California Utilities, 
No. 31 at pp. 14-15; NPCC, No. 32 at p. 4). The California Utilities 
comment cited the 1997 room air conditioner rulemaking, which cited a 
study by Allied-Signal demonstrating a 4 percent increase in system 
performance with the addition of a SLHX in a 2.5 ton split system AC 
application, and simulations by NIST for split-system air conditioning 
applications showing EER improvement of 3.5 percent \32\ for R-410A 
systems using SLHX. (California Utilities, No. 31 at pp. 14-15).
---------------------------------------------------------------------------

    \32\ This efficiency increase was described in the source as 
reduction of an EER loss of 6.5 percent (when comparing R-410A 
performance to HCFC-22, at 131 [deg]F outdoor temperature) to 3.2 
percent.
---------------------------------------------------------------------------

    DOE reviewed the room air conditioner rulemaking cited by the 
California Utilities and noted that the improvement was based on a 
comparison to a non-optimized system. DOE also considered the NIST 
simulation study referenced by the California Utilities.\33\ In this 
study, the EER improvement of 3.5 percent occurred for an outdoor 
temperature of 131 [deg]F. The paper includes performance data for an 
outdoor temperature condition of 95 [deg]F (which is used in the DOE 
Test Procedure), for which the EER improvement was 1.0 percent \34\ 
using a SLHX. These results were simulated for systems using 
reciprocating-type compressors, and the analyzed systems were not 
optimized to maximize performance of individual fluids. There is no 
indication in the paper that the simulations address room air 
conditioners because it does not mention outdoor air moisture content, 
which would be an important parameter affecting performance of room air 
conditioners. While the simulations show a potential for slight 
performance improvement, it is not clear that the simulations are 
applicable for room air conditioners, and the results were not 
validated experimentally. DOE therefore concludes that the cited 
studies do not support the conclusion that SLHXs will significantly 
improve room air conditioner efficiency.
---------------------------------------------------------------------------

    \33\ National Institute of Standards and Technology. Performance 
of R-22 and its Alternatives Working at High Outdoor Temperatures. 
In Eighth International Refrigeration Conference at Purdue 
University, 2000. West Lafayette, IN--July 25-28, 2000, pp. 47-54.
    \34\ Again, expressed as reduction of an EER loss of 2.5 percent 
(when comparing R-410A performance to HCFC-22, at a 95 [deg]F 
outdoor temperature) to 1.5 percent.
---------------------------------------------------------------------------

    During interviews conducted during the preliminary and final rule 
analysis, manufacturers did not indicate that SLHX could be used to 
improve system performance. Furthermore, use of SLHX's may be 
inconsistent with the operating temperature limits for compressors. The 
technology significantly raises the temperature of the suction gas 
entering the compressor. Because hermetic compressors are cooled by the 
suction gas, the compressor will overheat if the suction gas 
temperature exceeds limits specified by the compressor manufacturer. 
DOE notes that 65 [deg]F is typically the highest allowable suction 
temperature for R-410A rotary compressors. DOE noted that a SLHX 
operating at close to 50% effectiveness (as analyzed in the NIST study) 
would raise suction temperature roughly 20 [deg]F, thus significantly 
exceeding the specified limit. For additional details of this analysis, 
see chapter 3 of the TSD. Use of this technology would adversely affect 
the reliability of the compressor, and consequently, DOE cannot 
consider SLHX as a design option.

Flooded Evaporator Coils

    Flooded evaporator coils are evaporators for which refrigerant flow 
is higher than the amount that can be evaporated. As a result, a 
portion of the refrigerant leaves such an evaporator unevaporated (that 
is, still in the liquid phase). Such a design assures that liquid is 
available for boiling heat transfer throughout the evaporator. Because 
boiling heat transfer is much more effective than vapor phase heat 
transfer, the evaporator's heat transfer characteristics can be 
improved. However, the liquid refrigerant leaving the evaporator cannot 
be routed to the compressor, because (1) compressors cannot tolerate 
significant amounts of liquid without damage; and (2) this would 
represent lost cooling and lost efficiency. The liquid refrigerant 
returns to a reservoir from which it can be redirected to the 
evaporator. The reservoir inventory is controlled to allow low pressure 
vapor to exit to the compressor, while ``fresh'' refrigerant from the 
condenser enters through an expansion valve that may vary flow based on 
the reservoir liquid level.
    The California Utilities stated that DOE should consider flooded 
evaporator coils as a design option, as this technology is used in some 
refrigerant systems (California Utilities, No. 31 at p. 14). Oak Ridge 
National Laboratories (ORNL) tests on window air conditioners found 
that a flooded evaporator coil setup using R-22 increased cooling 
capacity by 8 percent.\35\
---------------------------------------------------------------------------

    \35\ V.C. Mei and F.C. Chen, et al. Experimental Analysis of a 
Window Air Conditioner with R-22 and Zeotropic Mixture of R-32/125/
134a. Energy Renewable and Research Section, Energy Division, Oak 
Ridge National Laboratory: Oak Ridge, TN. August 1995.
---------------------------------------------------------------------------

    DOE considered the ORNL study referenced by the California 
Utilities. The article describes work in which a room air conditioner 
was tested, modified to have a flooded evaporator, and then retested. 
Data provided in the article shows that the evaporator of the 
unmodified unit was very poorly controlled. A plot graph of heat 
exchanger tube temperature versus evaporator length shows the tube 
temperature rising after the refrigerant liquid had traveled 60 percent 
of the heat exchanger tube length, indicating that the refrigerant 
liquid has evaporated. Air conditioner designs that incorporate flooded 
evaporator coils are not optimized, and the performance of such designs 
could have improved significantly with much less costly changes than 
converting to a flooded evaporator. As a result, DOE does not believe 
that the cited ORNL study supports analyzing flooded evaporator coils 
as a technology option in the room air conditioner engineering 
analysis.

Automatic Timers

    The California Utilities stated that DOE should consider automatic 
timers as a design option in its analysis,

[[Page 22492]]

arguing that many room air conditioner models currently feature an 
automatic timer that shuts off operation after a pre-determined amount 
of time, thus avoiding unnecessary cooling (California Utilities, No. 
31 at p. 14). The California Utilities argued that this is a simple and 
inexpensive option that can be implemented to improve consumer utility 
and provide potential energy savings.
    DOE notes that automatic timers may save energy by preventing 
cooling of the space when occupants have left. However, the benefits of 
automatic timers would not be measured by the current or amended test 
procedures, unless the test procedure allocation of hours to full-load 
and standby or off mode were adjusted based on presence of the 
automatic timer. Information to allow proper allocation of the hours in 
this fashion is not available, thus the test procedure rulemaking did 
not establish adjustment of hours to address this technology. DOE 
acknowledges the importance of conducting appropriate test programs to 
provide a basis for crediting technologies such as automatic timers. 
DOE will consider supporting such work to assist in a future test 
procedure rulemaking. At this time, however, DOE cannot consider 
automatic timers in the engineering analysis.

B. Screening Analysis

    DOE uses the following four screening criteria to determine which 
technology options are suitable for further consideration in a 
standards rulemaking:
    1. Technological feasibility. DOE will consider technologies 
incorporated in commercial products or in working prototypes to be 
technologically feasible. (The technological feasibility of options was 
discussed in the preceding section as part of the market and technology 
assessment.)
    2. Practicability to manufacture, install, and service. If mass 
production and reliable installation and servicing of a technology in 
commercial products could be achieved on the scale necessary to serve 
the relevant market at the time the standard comes into effect, then 
DOE will consider that technology practicable to manufacture, install, 
and service.
    3. Adverse impacts on product utility or product availability. If 
DOE determines a technology would have significant 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 
consider this technology further.
    4. Adverse impacts on health or safety. If DOE determines that a 
technology will have significant adverse impacts on health or safety, 
it will not consider this technology further.

10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).
    Technologies that pass through the screening analysis are referred 
to as ``design options'' in the engineering analysis. Details of the 
screening analysis are in chapter 4 of the direct final rule TSD.
1. Clothes Dryers
    In the preliminary analysis, DOE identified the following 
technology options that could improve the efficiency of clothes dryers, 
as shown in Table IV.5.

      Table IV.5--Technology Options for Residential Clothes Dryers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
  Improved termination.
  Increased insulation.
  Modified operating conditions.
  Improved air circulation.
  Reverse tumble.
  Improved drum design.
Methods of Exhaust Heat Recovery (vented models only):
  Recycle exhaust heat.
  Inlet air preheat.
  Inlet air preheat, condensing mode.
Heat Generation Options:
  Heat pump, electric only.
  Microwave, electric only.
  Modulating, gas only.
  Water-cooling, ventless electric only.
  Indirect heating.
Component Improvements:
  Improved motor efficiency.
  Improved fan efficiency.
Standby Power Improvements:
  Switching power supply.
  Transformerless power supply with auto-powerdown.
------------------------------------------------------------------------

    For the preliminary analysis, DOE considered eliminating the 
following clothes dryer technology options from consideration:

Microwave, Electric Only

    DOE's research suggested that significant technical and safety 
issues would be introduced with microwave drying by the potential 
arcing from metallic objects in the fabric load, including zippers, 
buttons, or ``stray'' items such as coins. While DOE noted that efforts 
have been made to mitigate the conditions that are favorable to arcing, 
or to detect incipient arcing and terminate the cycle, the possibility 
of fabric damage could not be completely eliminated. Thus, for these 
reasons of consumer utility and adverse impacts on safety, microwave 
drying was not considered further for analysis.

Water-Cooling, Ventless Electric Only

    DOE noted that water-cooling for ventless electric clothes dryers, 
which uses water as a cooling fluid to condense the moisture in the air 
exiting the drum, would require significant plumbing to circulate water 
through a heat exchanger in the dryer and add to the complexity of 
maintenance. Such home renovations would require installing a water 
hook-up and drain in the laundry area, which is not typically done for 
clothes dryers. Therefore, DOE determined in the preliminary analysis 
that the water-cooling for ventless electric dryers technology option 
does not meet the criterion of practicability to install and service on 
a scale necessary to serve the relevant market at the time of the 
compliance date of a new standard and proposed screening it out of the 
analysis. DOE did not receive any comments objecting to this 
determination. For these reasons, DOE is continuing to screen out 
water-cooling for ventless electric clothes dryers in today's final 
rule.

Indirect Heating

    DOE tentatively concluded in the preliminary analysis that indirect 
heating would be viable only in residences which use a hydronic heating 
system. An energy conservation standard that required indirect heating 
would require homes without a hydronic heating system to have such a 
system installed. DOE also notes that there would be added maintenance 
requirements because the home's hydronic heating system because it 
would be used more frequently (that is, year-round). Also, to derive 
dryer heat energy from the home's heating system, significant plumbing 
work would be required to circulate heated water through a heat 
exchanger in the dryer. Therefore, DOE determined that this technology 
option does not meet the criterion of practicability to install on a 
scale necessary to serve the relevant market at the time of the 
compliance date of a new standard and did not consider it further in 
the preliminary analysis.
    In response, ACEEE commented that DOE should reconsider its 
decision to leave water-cooled clothes dryers unregulated because these 
products are very water-intensive. ACEEE stated that, although water-
cooled clothes dryers are currently of very limited use in the

[[Page 22493]]

United States, this technology is used overseas and could find a larger 
market niche in the United States if left unregulated. (ACEEE, No. 24 
at pp. 2-3) DOE believes that the current unavailability of such 
products in the Unites States, along with the reasons noted above, 
confirms its initial conclusion regarding the failure of this 
technology to meet the screening criteria of practicability to install 
and service on the scale necessary to serve the relevant market at the 
time of the effective date of a new standard. In addition, EPCA does 
not authorize DOE to set water-efficiency standards for clothes dryers. 
(42 U.S.C. 6291(6), 6295(g)) Therefore, DOE continues to screen out 
this technology option.
    No other comments were received objecting to the technology options 
which were screened out in the preliminary analysis, or to the initial 
determination that the remaining design options met all of the 
screening criteria listed above. Therefore, DOE considered the same 
design options in the final rule as those evaluated in the preliminary 
analysis (see Table IV.6).

   Table IV.6--Retained Design Options for Residential Clothes Dryers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
  Improved termination.
  Increased insulation.
  Modified operating conditions.
  Improved air circulation.
  Reverse tumble.
  Improved drum design.
Methods of Exhaust Heat Recovery (vented models only):
  Recycle exhaust heat.
  Inlet air preheat.
  Inlet air preheat, condensing mode.
Heat Generation Options:
  Heat pump, electric only.
  Modulating, gas only.
Component Improvements:
  Improved motor efficiency.
  Improved fan efficiency.
Standby Power Improvements:
  Switching power supply.
  Transformerless power supply with auto-powerdown.
------------------------------------------------------------------------

2. Room Air Conditioners
    In the preliminary analysis, DOE identified the following 
technology options that could improve the efficiency of room air 
conditioners, as shown in Table IV.7.

        Table IV.7--Technology Options for Room Air Conditioners
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Increased Heat Transfer Surface Area:
  Increased frontal coil area.
  Increased depth of coil (add tube rows).
  Increased fin density.
  Add subcooler to condenser coil.
Increased Heat Transfer Coefficients:
  Improved fin design.
  Improved tube design.
  Hydrophilic film coating on fins.
  Spray condensate onto condenser coil.
  Microchannel heat exchangers.
Component Improvements:
  Improved indoor blower and outdoor fan efficiency.
  Improved blower/fan motor efficiency.
  Improved compressor efficiency.
Part-Load Technology Improvements:
  Two-speed, variable-speed, or modulating-capacity compressors.
  Thermostatic or electronic expansion valves.
  Thermostatic cyclic controls.
Standby Power Improvements:
  Switching power supply.
------------------------------------------------------------------------

    For the preliminary analysis, DOE tentatively concluded that all 
room air conditioner technology options met the screening criteria 
listed above and did not propose to eliminate any of these technology 
options from consideration. DOE did not receive any comments objecting 
to this list of technology options and, therefore, retained all of the 
technologies in Table IV.7 as room air conditioner design options. As 
described and explained below in section IV.C.1.b below, however, some 
of the technologies were not considered in the engineering analysis.

C. Engineering Analysis

    The engineering analysis develops cost-efficiency relationships to 
show the manufacturing costs of achieving increased efficiency. DOE has 
identified the following three methodologies to generate the 
manufacturing costs needed for the engineering analysis: (1) The 
design-option approach, which provides the incremental costs of adding 
to a baseline model design options that will improve its efficiency; 
(2) the efficiency-level approach, which provides the relative costs of 
achieving increases in energy efficiency levels, without regard to the 
particular design options used to achieve such increases; and (3) the 
cost-assessment (or reverse engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data as to costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels.
    DOE conducted the engineering analyses for this rulemaking using 
the efficiency-level approach for clothes dryers and room air 
conditioners. For this analysis, DOE relied upon efficiency data 
published in multiple databases, including those published by CEC, the 
Consortium for Energy Efficiency (CEE), and ENERGY STAR, which were 
supplemented with laboratory testing, data gained through engineering 
analysis, and primary and secondary research. Details of the 
engineering analysis are in chapter 5 of the direct final rule TSD.
1. Technologies Not Analyzed
    In performing the engineering analysis, DOE did not consider for 
analysis certain technologies that were not evaluated for one or more 
of the following reasons: (1) Data are not available to evaluate the 
energy efficiency characteristics of the technology; (2) available data 
suggest that the efficiency benefits of the technology are negligible; 
and (3) for the reasons stated in the TP Final Rule, DOE did not amend 
the test procedure to measure the energy impact of these technologies.
    In the preliminary analysis, DOE did not include the following 
design options:
a. Clothes Dryers

Reverse Tumble

    As discussed in section IV.A.5.a, NRDC commented that the DOE 
clothes dryer test procedure may be underestimating the efficiency 
improvement associated with reverse tumble due to the composition of 
the test cloth. (NRDC, Public Meeting Transcript, No. 21.4 at pp. 42-
43) Because DOE did not amend the specifications for the test cloth 
composition in the TP Final Rule (as discussed in section III.A.1.d), 
and in the absence of comments providing information on the efficacy of 
reverse tumble for the existing DOE test cloth, DOE continues to 
conclude that no measurable energy savings are associated with this 
design option. Thus, this design option was not considered further in 
the analysis for today's final rule.

Improved Termination

    For the reasons noted in section III.A.1.b, DOE did not adopt 
amendments to its clothes dryer test procedure to better account for 
automatic cycle termination. Therefore, energy savings due to improved 
termination technologies cannot be measured according to the test 
procedure, and this design option was not considered further in the 
analysis for today's direct final rule.

[[Page 22494]]

b. Room Air Conditioners
    DOE eliminated the following technologies from further 
consideration due to the three criteria mentioned above.

1. Improved fin design
2. Improved tube design
3. Hydrophilic-film coating on fins
4. Spray condenser onto condenser coil
5. Improved indoor blower and outdoor fan efficiency
6. Variable speed compressors
7. Thermostatic or electronic expansion valves
8. Thermostatic cyclic controls

    Of these technologies, numbers 1 through 4 are used in baseline 
products. Information indicating efficiency improvement potential is 
not available for number 5. Any potential energy savings of 
technologies 6 through 8 cannot be measured with the established energy 
use metric because those technologies are associated with part-load 
performance. As discussed in Section III.A.2.d above, DOE did not amend 
the test procedure to measure part-load performance of room air 
conditioners. Chapter 5 of the direct final rule TSD discusses these 
reasons in greater detail.
2. Efficiency Levels and Cost-Efficiency Results
a. Clothes Dryers
    In the preliminary analysis, DOE analyzed active mode and standby 
mode separately to develop integrated cost-efficiency results. For 
vented clothes dryer product classes, DOE proposed the active mode 
efficiency levels shown in Table IV.8, which were based on EF values 
measured using the previous clothes dryer test procedure. For ventless 
clothes dryer product classes, DOE proposed the active mode efficiency 
levels shown in Table IV.9, which were based on EF values measured 
using the previous clothes dryer test procedure without the requirement 
to install an exhaust simulator. DOE proposed the standby power levels 
shown in Table IV.10 for all clothes dryer product classes.

              Table IV.8--Clothes Dryer Active Mode Efficiency Levels (EF)--Vented Product Classes
----------------------------------------------------------------------------------------------------------------
                                                                         Efficiency level (EF) lb/kWh
                                                             ---------------------------------------------------
              Level                     Efficiency level                     Electric     Electric
                                          description           Electric     compact      compact        Gas
                                                                standard      (120V)       (240V)
----------------------------------------------------------------------------------------------------------------
Baseline.........................  DOE Standard.............         3.01         3.13         2.90         2.67
1................................  Gap Fill.................         3.10         3.22         2.98         2.75
2................................  Gap Fill.................         3.16         3.29         3.09         2.85
3................................  Gap Fill/Maximum                   3.4         3.54          3.2         3.02
                                    Available.
4................................  Max-Tech.................         4.51         4.70         4.35  ...........
----------------------------------------------------------------------------------------------------------------


             Table IV.9--Clothes Dryer Active Mode Efficiency Levels (EF)--Ventless Product Classes
----------------------------------------------------------------------------------------------------------------
                                                                                          Efficiency level (EF)
                                                                                                 lb/kWh
                                                                                       -------------------------
                     Level                           Efficiency level description                      Electric
                                                                                          Electric   combination
                                                                                          compact      washer/
                                                                                           (240V)       dryer
----------------------------------------------------------------------------------------------------------------
Baseline......................................  DOE Test Data.........................         2.37         1.95
1.............................................  Gap Fill..............................         2.39         2.21
2.............................................  Gap Fill..............................         2.59         2.42
3.............................................  Max-Tech..............................         3.55         3.32
----------------------------------------------------------------------------------------------------------------


             Table IV.10--Clothes Dryer Standby Power Levels
------------------------------------------------------------------------
                                                             Power Input
              Level                 Standby power source          W
------------------------------------------------------------------------
Baseline........................  DOE Test Data and                 2.0
                                   Analysis.
1...............................  DOE Test Data...........          1.5
2...............................  DOE Test Data (Max-Tech)          0.08
------------------------------------------------------------------------

    In the preliminary analyses, DOE developed integrated efficiency 
levels based on the integrated EF (IEF) metric proposed as an 
alternative option in the TP NOPR. The IEF is calculated as the clothes 
dryer test load weight in lb divided by the sum of active mode per-
cycle energy use and standby/off mode per-cycle energy use in kWh. 
Table IV.11 through Table IV.13 show the integrated efficiency levels 
proposed in the preliminary analyses.

[[Page 22495]]



              Table IV.11--Clothes Dryer Integrated Efficiency Levels (IEF)--Vented Product Classes
----------------------------------------------------------------------------------------------------------------
                                                                   Integrated efficiency level (IEF) lb/kWh
                                                             ---------------------------------------------------
              Level                     Efficiency level                     Electric     Electric
                                          description           Electric     compact      compact        Gas
                                                                standard      (120V)       (240V)
----------------------------------------------------------------------------------------------------------------
Baseline.........................  DOE Standard + 2.0 W              2.96         3.00         2.79         2.63
                                    Standby.
1................................  Gap Fill + 2.0 W Standby.         3.04         3.08         2.86         2.71
2................................  Gap Fill + 2.0 W Standby.         3.10         3.15         2.96         2.80
3................................  Gap Fill/Maximum                  3.33         3.37         3.06         2.97
                                    Available + 2.0 W
                                    Standby.
4................................  Maximum Available + 1.5 W         3.35         3.41         3.10         2.98
                                    Standby.
5................................  Maximum Available + 0.08          3.40         3.53         3.19         3.02
                                    W Standby.
6................................  Heat Pump (Max-Tech) +            4.52         4.69         4.34  ...........
                                    0.08 W Standby.
----------------------------------------------------------------------------------------------------------------


 Table IV.12--Clothes Dryer Integrated Efficiency Levels (IEF)--Ventless
                         Electric Compact (240V)
------------------------------------------------------------------------
                                                            Integrated
                                                            efficiency
                                                            level (IEF)
                                     Efficiency level         lb/kWh
             Level                     description       ---------------
                                                             Electric
                                                           compact (240
                                                                V)
------------------------------------------------------------------------
Baseline.......................  Baseline + 2.0 W                   2.29
                                  Standby.
1..............................  Baseline + 1.5 W                   2.31
                                  Standby.
2..............................  Baseline + 0.08 W                  2.37
                                  Standby.
3..............................  Gap Fill + 0.08 W                  2.39
                                  Standby.
4..............................  Gap Fill + 0.08 W                  2.59
                                  Standby.
5..............................  Heat Pump (Max-Tech) +             3.54
                                  0.08 W Standby.
------------------------------------------------------------------------


 Table IV.13--Clothes Dryer Integrated Efficiency Levels (IEF)--Ventless
                   Electric Combination Washer/Dryers
------------------------------------------------------------------------
                                                           Integrated
                                                        efficiency level
                                                          (IEF) lb/kWh
             Level                 Efficiency level   ------------------
                                     description            Electric
                                                          combination
                                                          washer/dryer
------------------------------------------------------------------------
Baseline......................  Baseline + 2.0 W                    1.90
                                 Standby.
1.............................  Gap Fill + 2.0 W                    2.15
                                 Standby.
2.............................  Gap Fill + 2.0 W                    2.34
                                 Standby.
3.............................  Gap Fill + 1.5 W                    2.36
                                 Standby.
4.............................  Gap Fill + 0.08 W                   2.42
                                 Standby.
5.............................  Heat Pump (Max-Tech)                3.31
                                 + 0.08 W Standby.
------------------------------------------------------------------------

    DOE also noted that it was considering revisions to the clothes 
dryer test procedure for active mode, standby mode, and off mode, and 
that those potential amendments would affect the calculated IEF. (IEF 
has since been renamed CEF for this direct final rule to avoid 
confusion with an existing industry standard.) AHAM commented that, to 
ensure a rigorous analysis and to mitigate confusion, DOE should modify 
the baseline efficiency level to account for a revised initial RMC in 
the clothes dryer test procedure. (AHAM, No. 25 at p. 10) The TP Final 
Rule was published on January 6, 2011, and DOE has adjusted the 
efficiency levels, including the baseline level, as discussed later in 
this section to account for the impacts of all test procedure 
revisions, including those pertaining to initial RMC.

Integrated Efficiency Metric

    DOE received comments from interested parties on the adequacy of 
IEF as the energy efficiency metric for clothes dryer energy 
conservation standards. AHAM supported the incorporation of standby 
mode and off mode power into the total energy use of clothes dryers, 
and commented that the integrated metric is appropriate. (AHAM, No. 25 
at p. 2)
    Whirlpool commented that standby power technologies should not be 
considered as separate design options associated with specific TSLs, 
and that doing so would avoid the requirement that standby power be 
incorporated into the total energy use of the clothes dryer. Whirlpool 
also stated that standby levels should not vary by TSL. (Whirlpool, No. 
22 at p. 5) DOE notes that the CEF metric at each TSL incorporates a 
measure of standby power as a contributor to energy use along with 
energy use in active mode, as required by EPCA. Because CEF does not 
preferentially weigh the energy use contributions attributable to 
either active or standby mode, improvements in CEF due to standby power 
reductions are considered equally to those due to active mode design 
options. For these reasons, DOE believes that technologies associated 
with standby power reductions should be considered in the definition of 
efficiency levels and thus TSLs. In today's direct final rule, DOE

[[Page 22496]]

analyzes some TSLs that would require standby power reductions only, 
and some that would require reductions to both standby power and active 
mode power, as shown later in this section.
    The NRDC/ECOS report stated that the fact that natural gas clothes 
dryers tend to have lower average energy factors than electric clothes 
dryers could lead consumers to believe that electric dryers are 
generally more efficient. NRDC/ECOS report stated that conventional gas 
clothes dryers that have been available for 30 years have significantly 
less source energy use and environmental impact than today's efficient 
electric clothes dryers. The NRDC/ECOS report added that heat pump 
clothes dryers that may reach the U.S. market in the future have only 
slightly lower impacts than conventional gas clothes dryers. (NRDC, No. 
30 at pp. 17-18) The NRDC/ECOS report further stated that the current 
EF metric is not intuitive and fails to capture meaningful differences 
between electric and natural gas models. According to the NRDC/ECOS 
report, converting natural gas consumption into equivalent electrical 
consumption on a site basis ignores all of the losses that occur in the 
electrical generation and transmission process. The NRDC/ECOS report 
stated that this draws attention from the substantial advantage of most 
gas clothes dryers--that they convert their fuel directly into heat at 
the site where it is needed, avoiding upstream losses. According to the 
NRDC/ECOS report, there are three ways to compare gas and electric 
clothes dryers more fairly: (1) Source Btu basis, (2) total 
CO<INF>2</INF> emissions basis, and (3) energy cost basis. The NRDC/
ECOS report presented test results which showed that the standard 
natural gas clothes dryer uses less source energy, costs less, and 
emits less CO<INF>2</INF> per lb of water removed than any other option 
except (in some cases) a heat pump clothes dryer. (NRDC, No. 30 at pp. 
32-33) NRDC commented that DOE should consider reporting actual kWh and 
Btu consumption rather than converting to site equivalent kWh. NRDC 
stated that it would be more useful to consumers to have information on 
actual kWh of electricity and Btu of gas consumed. According to NRDC, 
organizations such as EnergyGuide, ENERGY STAR, and Top Ten could use 
this information to more accurately inform prospective buyers on 
CO<INF>2</INF> emitted or operating costs of a given clothes dryer. 
(NRDC, No. 26 at pp. 1, 3)
    In response, DOE notes that EPCA defines ``energy conservation 
standard'' in relevant part as either: (1) A performance standard which 
prescribes a minimum level of energy efficiency or a maximum quantity 
of energy use; or (2) for certain products, including clothes dryers 
but not including room air conditioners, a design requirement; the term 
also includes any other requirements that DOE may prescribe under 42 
U.S.C. 6295(r). (42 U.S.C. 6291(6)) EPCA also provides definitions for 
the terms ``energy use'' and ``energy efficiency''. Specifically, 
``energy use'' refers to the quantity of energy directly consumed by a 
consumer product at the point of use, and ``energy efficiency'' means 
the ratio of the useful output of services from a consumer product to 
the energy use of such product. (42 U.S.C. 6291(4)-(5)) Therefore, an 
energy conservation standard metric based on source energy use, 
emissions, or annual energy cost would be inconsistent with the 
definitions set forth in EPCA. In addition, DOE promulgates test 
procedures for all product classes of clothes dryers that calculate 
energy use or energy efficiency on a consistent basis, regardless of 
the type of energy used. The energy content of either the electricity 
or fossil fuels used at the site of the clothes dryer may be equally 
and interchangeably expressed in any unit of energy measurement, 
including kWh and Btu. DOE notes that, for other covered products which 
may consume gas as well as electricity, such as cooking products, DOE 
defines an energy efficiency metric (EF) in which any contributory site 
gas energy use is expressed in equivalent kWh. DOE continues to believe 
that the measure of CEF in terms of lb of clothes load per kWh is 
meaningful and representative of the performance for both electric and 
gas clothes dryers, and thus is not adopting alternative measures of 
energy use or energy efficiency.
    NRDC and the California Utilities recommended that the metric be 
based on the water removed in the clothes load per kWh. The NRDC/ECOS 
report stated that the efficiency using this approach would be measured 
by converting the lbs. of water removed into kWh with a conversion 
factor of 0.308 (the kWh necessary to evaporate a 1 lb. of water,) then 
dividing by the measured energy consumption. According to the NRDC/ECOS 
report, this metric would be more meaningful because it would measure 
the work actually being performed by the clothes dryer. The NRDC/ECOS 
report provided as an example the case in which a clothes dryer removed 
3 lbs. of water from either a heavily saturated small load of absorbent 
fabrics such as cotton or a lightly saturated larger load of 
synthetics. According to the NRDC/ECOS report, testing and reporting 
the results for both situations would help consumers choose the most 
efficient clothes dryers. The California Utilities stated that the 
metric should be based on lbs. of water removed per kWh, and that this 
metric would correct for small variations in actual test load or 
moisture content. The California Utilities also stated that this 
approach would eliminate the need for the 0.66 correction factor (in 
sections 4.1-4.3 of the current clothes dryer test procedure), which 
corrects for the RMC change during the test. (California Utilities, No. 
31 at pp. 11-12; NRDC, Public Meeting Transcript, No. 21.4 at pp. 49-
50; NRDC, No. 26 at pp. 1-3; NRDC, No. 30 at pp. 8, 32)
    As noted above, DOE did not amend the clothes dryer test procedure 
to allow for testing materials other than the current 50-50 cotton-
polyester test cloth. In addition, test conditions that would allow the 
test load size or initial RMC to vary would only be allowable if the 
resulting measured energy efficiency metric was independent of such 
variations, implying that the metric would need to be a linear function 
of these test conditions. DOE testing indicates that the efficacy of 
moisture removal becomes significantly non-linear as the RMC in the 
clothes load approaches low values, particularly near the 5-percent 
maximum allowable RMC for the conclusion of the test cycle according to 
the clothes dryer test procedure. Therefore, test loads with different 
initial RMC that are allowed to dry to a range of final RMCs, or 
differences in test load size, would not produce repeatable and 
consistent measures of energy efficiency performance due to this non-
linearity of efficiency through the drying process. In order for 
testing results to be comparable, the test procedure would need to be 
amended to specific an exact starting and ending RMC, which would 
likely represent a significant testing burden. In addition, DOE does 
not believe that a metric based on lbs. of water removed per kWh, as 
commented by NRDC/ECOS, would be more meaningful to consumers, who may 
not be aware of how much water is contained in their test load. For 
these reasons, and because DOE has insufficient data to suggest that a 
metric based on lbs. of water removed per kWh instead of lb of test 
cloth per kWh is a more accurate or representative measure of clothes 
dryer energy use, DOE is not amending the clothes dryer energy 
conservation standards as suggested by NRDC and the California 
Utilities.
    The California Utilities recommended that DOE consider a 
prescriptive design

[[Page 22497]]

requirement that all vented clothes dryers have a standard 4-inch round 
port for air intake, which would be the same diameter as the exhaust 
duct. According to the California Utilities, there would be negligible 
cost associated with this design, and would allow consumers the option 
to install outdoor intake air in the future. (California Utilities, No. 
31 at pp. 8, 12) As noted in section IV.A.5.a, DOE concluded that 
consideration of HVAC energy use associated with outdoor intake air was 
inconsistent with EPCA's requirement that a test procedure measure the 
energy use or energy efficiency of a covered product. As a result, DOE 
did not consider this technology in its analysis and is not adopting a 
prescriptive design standard addressing the potential implementation of 
outdoor intake air.
    PG&E inquired whether DOE would consider a performance metric that 
would include the non-energy benefit of clothing life if such data were 
available. (PG&E, Public Meeting Transcript, No. 21.4 at p. 129) DOE is 
not aware of such data and notes that EPCA provides that any test 
procedures prescribed or amended under this section shall be reasonably 
designed to produce test results which measure energy efficiency, 
energy use, water use, or estimated annual operating cost of a covered 
product during a representative average use cycle or period of use. (42 
U.S.C. 6293(b)(3)) DOE believes that a clothes dryer metric 
incorporating the non-energy benefit of clothing life would be 
inconsistent with this requirement. Therefore, DOE did not consider 
such a metric in the TP Final Rule. DOE is required, however, to 
consider any lessening of utility or performance in establishing energy 
conservation standards. 42 U.S.C. 6295(o)(2)(B)(i)(IV).
    The NRDC/ECOS report stated that, due to the complexity of the 
current DOE clothes washer test procedure and energy use calculations, 
it might be simpler for manufacturers to report total energy used to 
wash and dry one load. (NRDC, No. 30 at p. 32) EPCA provides separate 
standards for clothes dryers and clothes washers, and directs DOE to 
consider amended energy conservation standards for each product 
separately. (42 U.S.C. 6295(g)) Therefore, DOE is unable to adopt a 
single standard based on overall energy use of the wash and dry cycles 
in total.

Comments on Preliminary Analysis Integrated Efficiency Levels

    DOE also received comments from interested parties on the 
efficiency levels proposed in the preliminary analysis. The California 
Utilities stated that, with the low or negative incremental costs of 
the standby power design options, such design options should be 
implemented at lower efficiency levels. According to the California 
Utilities, this implementation would not affect clothes dryers with 
electromechanical controls, which have zero standby and are thus 
receiving a ``free'' benefit of 2.0 W. (California Utilities, No. 31 at 
pp. 11-12) DOE agrees that the low cost of the standby power design 
options should result in these technologies being included in the 
initial efficiency levels above the baseline. Thus, the clothes dryer 
efficiency levels analyzed in this direct final rule implement the 
standby power design options at the efficiency levels where they are 
most cost-effective. As noted by the California Utilities, these 
changes would impact only those clothes dryers that consume standby 
power, that is, those products with electronic controls.
    Earthjustice commented that EPCA contains an 
``anti[hyphen]backsliding provision'' that constrains DOE's authority 
in revising energy efficiency standards. According to Earthjustice, 
some of the clothes dryer efficiency levels that DOE is considering 
would violate the anti-backsliding requirement. Earthjustice commented 
that adding standby power consumption factors into the existing metrics 
reduces the stringency of each metric. Earthjustice provided an example 
for vented electric compact (120 V) clothes dryers in which the 
addition of the 2 W of standby power lowers the EF rating of the 
baseline efficiency level from 3.13 to 3.00. If DOE adopts efficiency 
level 1, with an IEF of 3.08, such a standard would violate EPCA's 
anti-backsliding provision. NRDC commented that if an existing vented 
electric compact (120V) clothes dryer model with electromechanical 
controls (which DOE has shown to consume no power in standby mode) has 
an EF of 3.10, it would be barred from the U.S. market by the existing 
standard. However, it would meet an IEF standard set at 3.08 (which DOE 
proposed as efficiency level 1 in the preliminary TSD). Earthjustice 
commented that implementing an IEF standard set at 3.08 would have the 
effect of decreasing the minimum required energy efficiency as is 
prohibited by the anti-backsliding provisions. (EJ, No. 28 at pp. 1-2; 
EJ, Public Meeting Transcript, No. 21.4 at p. 58) Earthjustice also 
commented that DOE's proposed approach to the integration of standby 
and off mode energy consumption into the performance standards for 
clothes dryers would require DOE to adopt standards that increase EF 
sufficiently to avoid violating EPCA's anti-backsliding provision. (EJ, 
No. 28 at p. 1)
    EPCA contains what is commonly known as an ``anti-backsliding'' 
provision. This provision prohibits DOE from prescribing any amended 
standard that either increases the maximum allowable energy use or 
decreases the minimum required energy efficiency of a covered product 
or equipment. (42 U.S.C. 6295(o)(1)) Congress also directed DOE to 
incorporate standby and off mode energy use in a single amended or new 
standard, or to prescribe a separate standard if such incorporation is 
not feasible, pursuant to 42 U.S.C. 6295(o). (42 U.S.C. 6295(gg)(3)) 
Today's final rule incorporates additional measures of energy 
consumption in the energy conservation standards for clothes dryers 
(that is, standby and off mode energy use). DOE notes that clothes 
dryers and room air conditioners that consume energy in standby and off 
modes have always used energy in these modes, and that today's final 
rule now accounts for that energy as directed by 42 U.S.C. 6295(gg). 
Given the Congressional directive to account for standby and off mode 
energy use, DOE does not believe that accounting for energy use in 
these modes could result in backsliding under 42 U.S.C. 6295(o)(1). In 
addition, DOE evaluated the clothes dryer TSLs to ensure that no 
product currently on the market could be determined compliant with the 
new energy conservation standards while consuming more energy in active 
mode than was allowable under the previous standards.
    NPCC commented that the clothes dryer test procedure does not 
measure the efficiency improvement associated with improved automatic 
termination controls such as moisture sensing. NPCC stated that because 
moisture sensing would require switching from electromechanical 
controls to electronic controls, part of the incremental manufacturing 
cost associated with electronic controls would be accounted for in the 
improved automatic cycle termination design option. However, NPCC also 
stated that all clothes dryers have some form of automatic cycle 
termination for which the current test procedure uses a fixed field use 
factor. NPCC commented that because moisture sensing requires 
electronic controls and thus consumes standby power, the cost of the 
implementing electronic controls is inappropriately accounted for only 
in the standby power design options

[[Page 22498]]

because the test procedure does not measure the efficiency improvement 
associated with moisture sensing. NPCC stated that part of the costs 
for implementing electronic controls should be accounted for in the 
costs associated with improved automatic cycle termination with 
moisture sensing. (NPCC, Public Meeting Transcript, No. 21.4 at pp. 58-
60, 61-62) NPCC commented that if a product is receiving the 1.04 field 
use factor for automatic cycle termination, then the cost of that type 
of device (that is, the cost of electronic controls) needs to be in the 
baseline cost analysis. (NPCC, Public Meeting Transcript, No. 21.4 at 
p. 60)
    DOE first notes that electronic controls are not required to 
implement automatic cycle termination. Clothes dryers are currently 
available on the market that use inputs from exhaust air temperature 
sensors to control or modify the length of the drying cycle without the 
use of electronic controls. For this reason, DOE did not include the 
cost of electronic controls in the baseline cost, unless the baseline 
product already incorporated electronic controls (such as, ventless 
electronic compact (240V) and ventless electric combination washer/
dryers). As discussed below, DOE noted that baseline efficiency clothes 
dryers implement both electromechanical controls and electronic 
controls. As a result, DOE analyzed baseline efficiency products 
available on the market, and weighted the contribution of the 2 W 
baseline standby power as well as the efficiency improvement and 
incremental manufacturing cost for standby power design changes based 
on the percentage of baseline efficiency products that used electronic 
controls.
    BSH commented that DOE should analyze and implement evenly 
distributed efficiency levels to help consumers make purchasing 
decisions. BSH also commented that the implementation of the proposed 
efficiency levels in the preliminary analyses would cause confusion to 
consumers. According to BSH, with a relatively small improvement in 
efficiency in the lower efficiency levels, a better rating can be 
achieved, and at the high end of the efficiency levels, much more 
effort must be taken to improve the rating. In addition, according to 
BSH, consumers will not support the higher efficiency level because 
they cannot see the advantage of paying a significantly higher price 
for a small change in product efficiency. (BSH, No. 23 at pp. 3-4) BSH 
also commented that DOE should use the same efficiency scale to analyze 
ventless and vented clothes dryers. According to BSH, ventless clothes 
dryers, especially those with heat pump technology, will be penalized 
by keeping a lower number of efficiency levels. (BSH, No. 23 at p. 4)
    DOE notes that the efficiency levels analyzed for the preliminary 
analyses were derived from the distribution of efficiencies for 
products available on the market from data provided in the CEC and 
NRCan product databases. DOE also notes that the efficiency levels for 
the ventless clothes dryer product classes were based on product 
testing as well as scaling of the efficiency improvements associated 
with vented clothes dryer product classes. The efficiency levels 
analyzed are not being established for a product marketing 
classification system for consumers to make purchasing decisions (as is 
done in the European energy class system). As a result, DOE does not 
intend to create an energy class system for product marketing based on 
evenly distributed efficiency levels.
    BSH commented that a separate classification of heat pump clothes 
dryers will not be possible because the European market shows large 
variation within this class of clothes dryers. According to BSH, heat 
pump clothes dryers in Europe differ by up to 40 percent in energy 
efficiency. (BSH, No. 23 at pp. 3-4) DOE notes that the efficiency 
levels established by DOE for the max-tech heat pump design are based 
on research and discussions with manufacturers. In addition, DOE does 
not intend to create a marketing classification system that would 
create a ``heat pump'' label from which consumers may perceive that all 
heat pump clothes dryers have the same efficiency. For these reasons, 
DOE continued to analyze the efficiency levels associated with heat 
pump clothes dryers presented in the preliminary analyses for today's 
direct final rule.
    BSH commented that the gap between conventional and heat pump 
dryers is not filled with intermediate levels to show consumers the 
large improvement in efficiency they would be paying for when making 
purchasing decisions. (BSH, No. 23 at p. 6) DOE is not aware of 
products available on the market at efficiency levels between the 
maximum-available (on the U.S. market) efficiency levels and the max-
tech heat pump efficiency level. In addition, DOE does not have any 
information indicating that design options are available that may be 
implemented to achieve efficiencies between the maximum-available and 
max-tech heat pump efficiency levels. As discussed above, DOE is not 
creating a marketing classification system for consumers to make 
purchasing decisions. As a result, DOE did not analyze additional 
intermediate efficiency levels between those associated with 
conventional and heat pump dryers.

Integrated Efficiency Levels--Final Rule

    As discussed in section III.A, DOE recently published the TP Final 
Rule amending the clothes dryer test procedure. DOE conducted testing 
on a sample of representative clothes dryers to evaluate the effects of 
the amendments to the clothes dryer test procedure on the measured EF. 
As discussed in section III.A.3.a, DOE test results showed that the 
measured EF according to the amended test procedure resulted in an 
average increase of about 20.1 percent for vented electric standard 
clothes dryers. For vented gas clothes dryers, the measured EF 
increased by an average of about 19.8 percent. For vented electric 
compact-size 120V and 240V clothes dryers, the measured EF increased by 
an average of about 15.6 and 12.8 percent, respectively. For the 
ventless clothes dryer product classes, the preliminary analyses were 
based on the DOE test procedure with only the proposed amendments to 
for ventless clothes dryers. DOE also conducted testing according to 
the final amended test procedure (that is, including changes to the 
initial RMC, water temperature for test load preparation, etc.). Test 
results showed that for ventless electric compact 240V clothes dryers 
and ventless electric combination washer/dryers, the measured EF 
increased by an average of about 13.6 and 11.4 percent, respectively. 
DOE applied these results for each product class to adjust the active 
mode efficiency levels to account for the amendments to the DOE clothes 
dryer test procedure in the TP Final Rule. In addition, DOE revised the 
active mode efficiency level 1 for vented electric standard clothes 
dryers and vented gas clothes dryers from 3.10 EF to 3.11 EF and from 
2.75 to 2.76 EF, respectively. The revisions were based on discussions 
with manufacturers and the efficiency improvement associated with the 
design options modeled by DOE. See chapter 5 of the direct final rule 
TSD for more details. DOE subsequently integrated the standby power 
efficiency levels to convert these EF values to CEF. For the 
preliminary analyses, DOE only incorporated incremental standby power 
levels into IEF efficiency levels above which electronic controls would 
be required as part of the active mode design option changes. At that 
point, DOE incorporated the incremental standby

[[Page 22499]]

power levels where it determined them to be most cost effective. 
Chapter 5 of the direct final rule TSD provides details of the active 
mode and standby mode efficiency levels for each product class. The 
revised CEF efficiency levels for each product class are shown below in 
Table IV.14 through Table IV.16.

              Table IV.14--Clothes Dryer Integrated Efficiency Levels (CEF)--Vented Product Classes
----------------------------------------------------------------------------------------------------------------
                                                                   Integrated efficiency level  (CEF) lb/kWh
                                                             ---------------------------------------------------
              Level                     Efficiency level                     Electric     Electric
                                          description           Electric     compact      compact        Gas
                                                                standard      (120V)       (240V)
----------------------------------------------------------------------------------------------------------------
Baseline.........................  DOE Standard + 2.0 W              3.55         3.43         3.12         3.14
                                    Standby.
1................................  DOE Standard + 1.5 W              3.56         3.48         3.16         3.16
                                    Standby.
2................................  DOE Standard + 0.08 W             3.61         3.61         3.27         3.20
                                    Standby.
3................................  Gap Fill + 0.08 W Standby         3.73         3.72         3.36         3.30
4................................  Gap Fill + 0.08 W Standby         3.81         3.80         3.48         3.42
5................................  Gap Fill/Maximum                  4.08         4.08         3.60         3.61
                                    Available + 0.08 W
                                    Standby.
6................................  Heat Pump (Max-Tech) +            5.42         5.41         4.89  ...........
                                    0.08 W Standby.
----------------------------------------------------------------------------------------------------------------


 Table IV.15--Clothes Dryer Integrated Efficiency Levels (CEF)--Ventless
                         Electric Compact (240V)
------------------------------------------------------------------------
                                                              Integrated
                                                              efficiency
                                                                level
                                                              (CEF)  lb/
              Level                    Efficiency level          kWh
                                          description       ------------
                                                               Electric
                                                               compact
                                                               (240 V)
------------------------------------------------------------------------
Baseline.........................  Baseline + 2.0 W Standby         2.55
1................................  Baseline + 1.5 W Standby         2.59
2................................  Baseline + 0.08 W                2.69
                                    Standby.
3................................  Gap Fill + 0.08 W                2.71
                                    Standby.
4................................  Gap Fill + 0.08 W                2.80
                                    Standby.
5................................  Heat Pump (Max-Tech) +           4.03
                                    0.08 W Standby.
------------------------------------------------------------------------


 Table IV.16--Clothes Dryer Integrated Efficiency Levels (CEF)--Ventless
                   Electric Combination Washer/Dryers
------------------------------------------------------------------------
                                                              Integrated
                                                              efficiency
                                                                level
                                                              (CEF)  lb/
                                       Efficiency level          kWh
              Level                       description       ------------
                                                               Electric
                                                             combination
                                                               washer/
                                                                dryer
------------------------------------------------------------------------
Baseline.........................  Baseline + 2.0 W Standby         2.08
1................................  Gap Fill + 2.0 W Standby         2.35
2................................  Gap Fill + 1.5 W Standby         2.38
3................................  Gap Fill + 0.08 W                2.46
                                    Standby.
4................................  Gap Fill + 0.08 W                2.56
                                    Standby.
5................................  Heat Pump (Max-Tech) +           3.69
                                    0.08 W Standby.
------------------------------------------------------------------------

Cost-Efficiency Results--Preliminary Analysis

    For the preliminary analysis, DOE first analyzed design options 
separately for active mode and standby mode and developed the cost-
efficiency relationships based on product teardowns and cost modeling. 
Details of the active mode and standby mode cost-efficiency 
relationships for each product class are presented in chapter 5 of the 
preliminary TSD. DOE then developed overall cost-efficiency 
relationships for the IEF efficiency levels presented in the 
preliminary analyses. Table IV.17 through Table IV.22 shows DOE's 
estimates of incremental manufacturing cost for improvement of clothes 
dryer IEF above the baseline. Also shown below are the technologies DOE 
analyzed for each efficiency level to develop incremental manufacturing 
costs. Detailed descriptions of the design options associated with each 
efficiency level are also presented in chapter 5 of the preliminary 
TSD. DOE used an efficiency level approach, noting that different 
manufacturers may implement different design changes to achieve certain 
efficiency levels.

[[Page 22500]]



   Table IV.17--Preliminary Analysis: Cost-Efficiency Relationship for
                 Vented Electric Standard Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (IEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (2.96)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (3.04)......................  DOE Standard + Change              11.89
                                 in Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
2 (3.10)......................  IEL 2 + Inlet Air Pre-             63.56
                                 Heating.
3 (3.33)......................  IEL 2 + Modulating                 97.48
                                 Heat.
4 (3.35)......................  IEL 3 + 1.5 W Standby.             98.78
5 (3.40)......................  IEL 3 + 0.08 W Standby             98.14
6 (4.52)......................  Heat Pump + 0.08 W                259.13
                                 Standby.
------------------------------------------------------------------------


   Table IV.18--Preliminary Analysis: Cost-Efficiency Relationship for
              Vented Electric Compact (120V) Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (IEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (3.00)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (3.08)......................  DOE Standard + Change              10.95
                                 in Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
2 (3.15)......................  IEL 2 + Inlet Air Pre-             63.37
                                 Heating.
3 (3.37)......................  IEL 2 + Modulating                 96.45
                                 Heat.
4 (3.41)......................  IEL 3 + 1.5 W Standby.             97.75
5 (3.53)......................  IEL 3 + 0.08 W Standby             97.11
6 (4.69)......................  Heat Pump + 0.08 W                246.35
                                 Standby.
------------------------------------------------------------------------


   Table IV.19--Preliminary Analysis: Cost-Efficiency Relationship for
              Vented Electric Compact (240V) Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (IEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (2.79)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (2.86)......................  DOE Standard + Change              10.95
                                 in Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
2 (2.96)......................  IEL 2 + Inlet Air Pre-             63.37
                                 Heating.
3 (3.06)......................  IEL 2 + Modulating                 96.45
                                 Heat.
4 (3.10)......................  IEL 3 + 1.5 W Standby.             97.75
5 (3.19)......................  IEL 3 + 0.08 W Standby             97.11
6 (4.34)......................  Heat Pump + 0.08 W                246.35
                                 Standby.
------------------------------------------------------------------------


   Table IV.20--Preliminary Analysis: Cost-Efficiency Relationship for
                        Vented Gas Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (IEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (2.63)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (2.71)......................  DOE Standard + Change              14.79
                                 in Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
2 (2.80)......................  IEL 2 + Inlet Air Pre-             65.36
                                 Heating.
3 (2.97)......................  IEL 2 + Modulating                156.01
                                 Heat.
4 (2.98)......................  IEL 3 + 1.5 W Standby.            157.31
5 (3.02)......................  IEL 3 + 0.08 W Standby            156.67
------------------------------------------------------------------------


   Table IV.21--Preliminary Analysis: Cost-Efficiency Relationship for
             Ventless Electric Compact (240V) Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (IEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (2.29)...............  Baseline + 2.0 W                      $0
                                 Standby.
1 (2.31)......................  Baseline + 1.5 W                    1.30
                                 Standby.
2 (2.37)......................  Baseline + 0.08 W                   0.66
                                 Standby.

[[Page 22501]]

 
3 (2.39)......................  IEL 2 + Change in                  13.01
                                 Airflow Patterns,
                                 Open-Cylinder Drum.
4 (2.59)......................  IEL 3 + Modulating                 69.02
                                 Heat.
5 (3.54)......................  Heat Pump + 0.08 W                216.37
                                 Standby.
------------------------------------------------------------------------


   Table IV.22--Preliminary Analysis: Cost-Efficiency Relationship for
               Ventless Electric Combination Washer/Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (IEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (1.90)...............  Baseline + 2.0 W                      $0
                                 Standby.
1 (2.15)......................  Baseline + 2.0 W                    0.81
                                 Standby + Baseline
                                 Automatic Termination.
2 (2.34)......................  IEL 1 + Modulating                 54.04
                                 Heat.
3 (2.36)......................  IEL 2 + 1.5 W Standby.             55.34
4 (2.42)......................  IEL 2 + 0.08 W Standby             54.70
5 (3.31)......................  Heat Pump + 0.08 W                230.83
                                 Standby.
------------------------------------------------------------------------

    DOE received comments from interested parties on the whether the 
baseline clothes dryer manufacturing costs should be adjusted to 
reflect the cost of complying with the Underwriters Laboratory (UL) 
Standard 2158 ``Electric Clothes Dryers'' (UL 2158) fire containment 
requirements. AHAM commented that it would need to look into and 
understand how the fire containment regulation in UL 2158 would affect 
the cost similar to the refrigerant change from R-22 to R-410a for room 
air conditioners. (AHAM, Public Meeting Transcript, No. 21.4 at p. 153) 
AHAM commented that when manufacturers submitted incremental clothes 
dyer manufacturing cost estimates to DOE in late 2008, costs to comply 
with UL 2158 were not included. According to AHAM, while the new UL 
requirements may not directly impact energy efficiency, the 
requirements place significant cumulative regulatory burden on clothes 
dryer manufacturers. AHAM commented that DOE should evaluate an 
additional step for clothes dryers, where the costs to implement the UL 
fire containment requirements are incorporated into the baseline 
analysis, similar to the approach used to evaluate the phase[hyphen]out 
of R-22 to R-410A for room air conditioners. AHAM commented that DOE 
should evaluate these costs through manufacturer interviews and 
determine how this cost affects the incremental costs to reach higher 
efficiency. (AHAM, No. 25 at p. 5) DOE notes that it attempted to 
obtain data on the incremental manufacturing cost associated with 
complying with the fire containment requirements in UL 2158 during 
manufacturing interviews. While manufacturers noted that different 
manufacturers will be required to make different changes to their 
product design to meet the fire containment requirements, DOE did not 
receive sufficient data to determine the incremental manufacturing 
costs to baseline clothes dryers to comply with the fire containment 
requirements of UL 2158. In addition, DOE did not receive sufficient 
information to indicate that the cost associated with complying with UL 
2158 would vary at efficiency levels above the baseline. As a result, 
DOE did not include additional cost to comply with UL 2158 in the 
baseline manufacturing production cost. As discussed below in section 
IV.I.3.b, DOE has investigated the costs of complying with the fire 
containment requirements in UL 2158 in the cumulative regulatory burden 
for the MIA.

Cost-Efficiency Results--Final Rule

    For today's final rule, DOE updated the cost-efficiency analysis 
from the preliminary analyses by updating the costs of raw materials 
and purchased components, as well as updating costs for manufacturing 
equipment, labor, and depreciation.
    In addition, based on discussions with clothes dryer manufacturers, 
DOE revised the design options analyzed for each integrated efficiency 
level in the preliminary analyses. Based on these discussions, DOE 
believes that manufacturers would apply a two-stage modulating heater 
design (which would also require moisture sensing and multi-speed 
airflow) to achieve integrated efficiency level 4 for all clothes dryer 
product classes. In addition, based on discussions with manufacturers, 
DOE believes that inlet-air preheating (which would require better 
airflow control and more advanced control systems), along with the 
design options for the lower efficiency levels (that is, changes in 
airflow patterns, open cylinder drum, dedicated heater duct, two-stage 
modulating heat, and standby power changes), would be applied to 
achieve integrated efficiency level 5 (maximum-available) for vented 
clothes dryer product classes. As a result, the max-tech efficiency 
level for vented gas clothes dryers would correspond to inlet air pre-
heating.
    As discussed above, DOE also believes that the low cost of the 
standby power design options should result in these technologies being 
included in the initial efficiency levels above the baseline. As a 
result, DOE revised the order of the design options and efficiency 
levels presented in the preliminary analyses. As discussed above in 
this section, DOE previously incorporated incremental standby power 
levels into integrated efficiency levels above which electronic 
controls would be required as part of the active mode design option 
changes. At that point, DOE incorporated the incremental standby power 
levels where it determined them to be most cost effective. For today's 
final rule, DOE applied the standby power levels immediately above the 
baseline level because they were determined to be the most cost-
effective design option. The revised order of design options are shown 
below in Table IV.23 through

[[Page 22502]]

Table IV.28. DOE also noted that for the integrated efficiency levels 
where electronic controls are not required for the design changes, the 
standby power level changes would impact only those clothes dryers that 
consume standby power, that is, those products with electronic 
controls. As a result, DOE analyzed baseline efficiency products 
available on the market, and weighted the efficiency improvement and 
incremental manufacturing cost based on the percentage of baseline 
efficiency products that have electronic controls.\36\ For the 
integrated efficiency levels for which electronic controls would be 
required as part of the active mode design changes, DOE assumed that 
the standby power levels and incremental manufacturing costs affected 
100 percent of clothes dryer models.
---------------------------------------------------------------------------

    \36\ DOE's review of currently available models with baseline 
efficiency showed that roughly 74 percent of models have electronic 
controls.
---------------------------------------------------------------------------

    Table IV.23 through Table IV.28 shows the cost-efficiency results, 
along with the technologies DOE analyzed for each efficiency level to 
develop incremental manufacturing costs. Details of the cost-efficiency 
analysis and descriptions of the technologies associated with each 
design change are presented in chapter 5 of the direct final rule TSD.

 Table IV.23--Cost-Efficiency Relationship for Vented Electric Standard
                             Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (CEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (3.55)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (3.56)......................  DOE Standard + 1.5 W                0.68
                                 Standby.
2 (3.61)......................  DOE Standard + 0.08 W               0.82
                                 Standby.
3 (3.73)......................  IEL 2 + Change in                   8.74
                                 Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
4 (3.81)......................  IEL 3 + 2-Stage                    50.67
                                 Modulating Heat.
5 (4.08)......................  IEL 4 + Inlet Air Pre-             88.89
                                 Heating.
6 (5.42)......................  Heat Pump + 0.08 W                280.54
                                 Standby.
------------------------------------------------------------------------


  Table IV.24--Cost-Efficiency Relationship for Vented Electric Compact
                          (120V) Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (CEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (3.43)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (3.48)......................  DOE Standard + 1.5 W                0.68
                                 Standby.
2 (3.61)......................  DOE Standard + 0.08 W               0.82
                                 Standby.
3 (3.72)......................  IEL 2 + Change in                  21.46
                                 Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
4 (3.80)......................  IEL 3 + 2-Stage                    62.76
                                 Modulating Heat.
5 (4.08)......................  IEL 4 + Inlet Air Pre-            109.31
                                 Heating.
6 (5.41)......................  Heat Pump + 0.08 W                267.48
                                 Standby.
------------------------------------------------------------------------


  Table IV.25--Cost-Efficiency Relationship for Vented Electric Compact
                          (240V) Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (CEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (3.12)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (3.16)......................  DOE Standard + 1.5 W                0.68
                                 Standby.
2 (3.27)......................  DOE Standard + 0.08 W               0.82
                                 Standby.
3 (3.36)......................  IEL 2 + Change in                  21.46
                                 Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
4 (3.48)......................  IEL 3 + 2-Stage                    62.76
                                 Modulating Heat.
5 (3.60)......................  IEL 4 + Inlet Air Pre-            109.31
                                 Heating.
6 (4.89)......................  Heat Pump + 0.08 W                267.48
                                 Standby.
------------------------------------------------------------------------


 Table IV.26--Cost-Efficiency Relationship for Vented Gas Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (CEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (3.14)...............  DOE Standard + 2.0 W                  $0
                                 Standby.
1 (3.16)......................  DOE Standard + 1.5 W                0.68
                                 Standby.
2 (3.20)......................  DOE Standard + 0.08 W               0.82
                                 Standby.
3 (3.30)......................  IEL 2 + Change in                   9.12
                                 Airflow Patterns,
                                 Dedicated Heater
                                 Duct, Open-Cylinder
                                 Drum.
4 (3.42)......................  IEL 3 + 2-Stage                    72.32
                                 Modulating Heat.
5 (3.61)......................  IEL 4 + Inlet Air Pre-            109.98
                                 Heating.
------------------------------------------------------------------------


[[Page 22503]]


 Table IV.27--Cost-Efficiency Relationship for Ventless Electric Compact
                          (240V) Clothes Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (CEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (2.55)...............  Baseline + 2.0 W                      $0
                                 Standby.
1 (2.59)......................  Baseline + 1.5 W                    0.93
                                 Standby.
2 (2.69)......................  Baseline + 0.08 W                   1.11
                                 Standby.
3 (2.71)......................  IEL 2 + Change in                  26.42
                                 Airflow Patterns,
                                 Open-Cylinder Drum.
4 (2.80)......................  IEL 3 + 2-Stage                    57.80
                                 Modulating Heat.
5 (4.03)......................  Heat Pump + 0.08 W                242.36
                                 Standby.
------------------------------------------------------------------------


     Table IV.28--Cost-Efficiency Relationship for Ventless Electric
                        Combination Washer/Dryers
------------------------------------------------------------------------
                                                           Incremental
  Integrated efficiency level         Technology          manufacturing
         (CEF), lb/kWh                                        cost
------------------------------------------------------------------------
Baseline (2.08)...............  Baseline + 2.0 W                      $0
                                 Standby.
1 (2.35)......................  Baseline + 2.0 W                    1.51
                                 Standby + Baseline
                                 Automatic Termination.
2 (2.38)......................  IEL 1 + 1.5 W Standby.              2.44
3 (2.46)......................  IEL 2 + 0.08 W Standby              2.62
4 (2.56)......................  IEL 3 + 2-Stage                    31.69
                                 Modulating Heat.
5 (3.69)......................  Heat Pump + 0.08 W                297.54
                                 Standby.
------------------------------------------------------------------------

b. Room Air Conditioners
    During the preliminary analysis, DOE performed the room air 
conditioner engineering analysis as follows:
    <bullet> Reverse engineering and teardown for 21 room air 
conditioners across 6 product classes.
    <bullet> Interviews with room air conditioner manufacturers to 
obtain greater insight into design strategies and their associated 
costs to improve efficiency, including designs incorporating R-410A 
refrigerant.
    <bullet> Energy modeling for room air conditioner designs using R-
410A refrigerant.
    DOE selected teardown products covering the range of available 
efficiency levels at a group of selected capacities. The products 
selected for teardown were designed for HCFC-22 refrigerant because DOE 
conducted this work before the January 1, 2010 phaseout of this 
refrigerant for new products was required. 74 FR 66450 (Dec. 19, 2009) 
DOE modeled the 21 HCFC-22 teardown units to calibrate the model before 
modeling the R-410A efficiency levels. DOE also identified one R-410A 
room air conditioner during the preliminary analysis and analyzed it in 
the reverse engineering analysis.
    From these analyses, DOE produced R-410A cost-efficiency curves for 
each of the analyzed product classes. Details of the engineering 
analysis are provided in the direct final rule TSD chapter 5.
    DOE received several comments from interested parties on its 
approach to the engineering analysis, as described below. Stakeholders 
commented on (1) the availability of R-410A products and data for 
incorporation into the engineering analysis, and (2) limitations on the 
maximum size of room air conditioners.

Conversion to R-410a

    During the preliminary analysis public meeting, DOE requested 
comments on the approach for the engineering analysis for room air 
conditioners, specifically on the use of both energy modeling and 
manufacturer cost modeling. DOE explained that this was the best 
approach for the preliminary engineering analysis. An efficiency level 
analysis based on only teardowns of specific products at different 
efficiency levels would have been based on HCFC-22 and would not have 
been representative of the R-410A products that would be available on 
the compliance date for the rule.
    ACEEE suggested that DOE's analysis should be updated due to the 
transition from HCFC-22 refrigerant (ACEEE, No. 24 at p. 4). ACEEE and 
the California Utilities recommended that DOE revise its analysis using 
current R-410A models for product teardowns, as it would enable DOE to 
more accurately determine the energy use of new room air conditioners 
(ACEEE, No. 24 at p. 4; California Utilities, No. 31 at p. 17). In 
addition, the California Utilities recommended that DOE conduct testing 
of products that contain R-410A refrigerant. (California Utilities, No. 
31 at p. 17)
    During the preliminary analysis phase of this rulemaking, DOE 
indicated that there was only one R-410A product available on the 
market for analysis. Subsequently, however, DOE examined information 
associated with commercialized R-410A products and made appropriate 
adjustments based on the new information, as described below.
    In the engineering analysis supporting today's final rule, DOE 
purchased and conducted teardowns on four R-410A products to update and 
validate the analysis performed during the preliminary analysis. Table 
IV.29 lists the R-410A products used. DOE focused this effort on the 
largest and most efficient units.

     Table IV.29--R-410A Room Air Conditioners Selected for Teardown
------------------------------------------------------------------------
                                                     Capacity
                   Product class                      Btu/hr      EER
------------------------------------------------------------------------
1.................................................       5000        9.7
2.................................................      6,000       12.0
3.................................................     12,000       10.8
5B................................................     28,500        8.5
------------------------------------------------------------------------

    The new information obtained from the four R-410A product 
teardowns, and examination of product information of available R-410A 
products, confirmed that the baseline product designs, design option 
costs, and design pathways chosen during the preliminary analysis, 
developed based on teardowns of HCFC-22 units, provided accurate 
results for calculating the cost-efficiency curves for R-410A designs.
    SCE noted that a study conducted by NIST for split systems 
indicated that R-410A dropped in efficiency compared with R-22 only in 
systems with condensing temperatures above 95 [deg]F.

[[Page 22504]]

(SCE, Public Meeting Transcript, No. 21.4 at p. 69)
    DOE notes that its modeling of room air conditioners indicates that 
they operate with condensing temperatures between 110 [deg]F and 130 
[deg]F under DOE test conditions, depending on the sizes of the heat 
exchangers. DOE's analysis confirms that the impact of the switch to R-
410A is more severe as condensing temperatures increase above 95 
[deg]F, and that additional improvements in efficiency (larger heat 
exchangers, more efficient components, and similar improvements) are 
required to reach comparable efficiencies to HCFC-22. Energy modeling 
of R-410A and HCFC-22 room air conditioners shows that a system modeled 
with HCFC-22 experiences an efficiency reduction if a ``drop-in'' of R-
410A is considered (that is, switch refrigerant and make no other 
system changes).
    As discussed previously, DOE conducted the engineering analysis 
based on use of R-410A refrigerant. DOE sought information on the 
performance of R-410A rotary compressors of varying efficiency levels 
for all of the products under analysis. In many cases, the range of 
efficiency for which compressor vendors were able to provide 
performance data was limited. Because conducting the analysis generally 
required knowledge not just of design point capacity and EER, DOE 
requested performance data for a representative range of evaporating 
and condensing conditions. In some cases, the trends of compressor 
performance as a function of operating conditions were extrapolated 
from the trends exhibited by a compressor of the same refrigerant of 
nearly the same capacity. During the preliminary analysis, DOE 
considered the available performance data for R-410A rotary 
compressors, noting that discussions with compressor vendors revealed 
that many vendors were still developing their R-410A compressor lines 
and could only provide preliminary data. The compressors for which 
performance data was available varied significantly in EER, depending 
on their capacity. DOE did not consider increases in compressor 
efficiency as a design option, because no higher-efficiency compressor 
data was available.
    The California Utilities commented that concern over the cost and 
availability of R-410A compressors may be mitigated as designs and 
efficiency of these compressors improve, and as the market grows and 
availability of compressors increases. (California Utilities, No. 31 at 
p. 17) EEI asked whether DOE conducted testing on R-410A compressors 
during its analysis. (EEI, Public Meeting Transcript, No. 21.4 at pp. 
67-68)
    DOE did not conduct tests on R-410A compressors during the 
engineering analysis, but has no reason to believe that the 
manufacturers' performance data is incorrect. During the final rule 
analyses, however, DOE obtained additional data regarding R-410A 
compressor performance and did consider EER improvement, as described 
below.
    During interviews conducted during the final rule phase of today's 
final rule, individual manufacturers reported that vendor selections of 
R-410A rotary compressors were still limited, and that compressor 
vendors, where they had once offered up to three different efficiency 
tiers of compressors, now only offered one or two tiers. One 
manufacturer reported a need to source from many different vendors to 
achieve performance goals. Individual manufacturers identified 10 EER 
as the maximum available efficiency for R-410A compressors, but 
reported testing of higher efficiency compressors.
    DOE also reviewed R-410A compressor options available on compressor 
vendors' Web sites, and also contacted compressor vendors to discuss 
their current R-410A compressor options.
    In the analysis for today's final rule, DOE added a design option 
to its engineering analysis for increasing compressor efficiency to the 
identified maximum compressor EER level.
    During the preliminary analysis, DOE sought information on the 
performance of R-410A rotary compressors of varying efficiency levels 
for all of the products under analysis. In many cases, the range of 
efficiency for which vendors provided performance data for R-410A 
compressors was limited. In most cases, compressor vendors had 
developed sufficiently for use in products compressors at only one 
efficiency level at each of the relevant capacities that DOE examined. 
These efficiency levels varied widely, depending on the available 
compressors. Due to the lack of maturity of the R-410A rotary 
compressor market at that time, DOE could not confidently project that 
higher efficiency levels would be made available.
    During the final rule analysis, DOE again reviewed the R-410A 
compressor market and the available compressors and found that many 
more R-410A rotary compressor options at varying efficiency levels had 
been developed. The highest available nominal EER for R-410A rotary 
compressors with capacities less than 18,000 Btu/h is 10 EER, while the 
highest available EER for compressors with capacities greater than 
18,000 Btu/h is 10.3 EER. Interviews with individual manufacturers 
supported these observations.
    Consequently, DOE has concluded that 10 EER is a reasonable maximum 
available EER for rotary R-410A compressors in capacities suitable for 
product classes 1 (room air conditioners without reverse cycle, with 
louvered sides, and capacity less than 6,000 Btu/h); 3 (room air 
conditioners without reverse cycle, with louvered sides, and capacities 
8,000 to 13,999 Btu/h); 8A (room air conditioners without reverse 
cycle, without louvered sides, and capacities 8,000 to 10,999 Btu/h); 
and 8B (room air conditioners without reverse cycle, without louvered 
sides, and capacities 11,000 to 13,999 Btu/h). Also, DOE concluded that 
10.3 EER is a reasonable maximum available EER for rotary R-410A 
compressors in capacities suitable for product classes 5A (room air 
conditioners without reverse cycle, with louvered sides, and capacities 
20,000 to 27,999 Btu/h) and 5B (room air conditioners without reverse 
cycle, with louvered sides, and capacity 28,000 Btu/h or more). 
Thereby, DOE selected 10.0 EER as the maximum EER compressor level for 
the analysis of product classes 1, 3, 8A, and 8B; and 10.3 EER as the 
maximum compressor level for the analysis of product classes 5A and 5B.
    During the analysis for today's final rule, in cases where 
compressor data was unavailable for the two maximum EER levels selected 
by DOE (as discussed above), the trends of compressor performance as a 
function of operating conditions were extrapolated. Compressor 
performance was extrapolated from the trends exhibited by a compressor 
currently offered on the market that used the same refrigerant of 
nearly the same capacity. DOE extrapolated compressor data for 10 EER 
compressors from similar compressors with ratings ranging from 9.4 EER 
to 9.7 EER, and compressor data for 10.3 EER compressor from similar 
compressor with 10 EER ratings. DOE noted the rapid pace of development 
of R-410A compressors (over the course of this rulemaking); 
manufacturer interviews suggested that this rapid development is on-
going and is likely to continue. Thus, the data suggests that 
manufacturers will be able to incorporate R-410A rotary compressors of 
capacities for which data was not available into air conditioners by 
the new energy standard's compliance date in 2014. DOE notes that 
compressors at the selected max-tech EER levels (for some capacity 
levels analyzed) are already available on the market, and some

[[Page 22505]]

products may already use these compressors. DOE has determined that 
such compressors are currently manufactured at many more capacity 
levels than were observed during the preliminary analysis. Additional 
details of this analysis are available in chapter 5 of the direct final 
rule TSD.
    The greater availability of rotary compressors also caused DOE to 
eliminate consideration of scroll compressors. DOE had used scroll 
compressors as a design option during the preliminary analysis. 
However, the higher EER of high-capacity rotary compressors that are 
now available shifts the economic attractiveness of scroll compressor 
technology such that it is no longer cost effective.

Size Increases

    In the preliminary analysis, DOE considered chassis size increases 
to increase the efficiency of window units, which corresponded to 
product classes 1, 3, and 5. DOE believes increases in coil frontal 
area and package size are among the primary factors contributing to EER 
improvements in the higher-efficiency teardown units for product 
classes 1, 3, and 5.
    DOE selected baseline, medium, and large chassis sizes based on the 
range of sizes of available room air conditioners. DOE did not consider 
chassis size increases beyond the range of available products, and 
considered both the physical volume and the weight of the unit. DOE 
performed cost modeling and energy modeling of these larger chassis 
sizes to calculate cost and efficiency impacts due to chassis size 
increases, based on product teardowns.
    During the preliminary analysis public meeting, DOE requested 
comment on the approach for determining appropriate maximum sizes for 
different product classes and capacities. DOE received stakeholder 
comments on both non-louvered room air conditioner sizes and louvered 
room air conditioner sizes.

Non-Louvered Room Air Conditioner Sizes

    PG&E commented that the size of through-the-wall room air 
conditioners (products without louvers) would not necessarily be 
constrained if allowed to project into the outdoor space. (PG&E, Public 
Meeting Transcript, No. 21.4 at p. 77) In response, GE stated that 
existing wall sleeves do not allow for additional growth in depth, and 
through-the-wall units are typically slid into an existing wall sleeve. 
(GE, Public Meeting Transcript, No. 21.4 at p. 77) To achieve 
additional depth, the existing wall sleeve would need to be replaced. 
AHAM also noted that while additional heat exchanger coils may increase 
efficiency, placing these coils too deep within the unit will actually 
decrease the heat transfer efficiency. (AHAM, No. 25 at p. 7)
    DOE did not consider chassis size growths as a design option for 
product class 8 (room air conditioners without reverse cycle, without 
louvered sides, and capacities 8,000 to 13,999 Btu/h) in the 
preliminary analysis. According to manufacturer interviews, the 
majority of non-louvered products are replacement products that must 
fit into existing building sleeves. Building sleeves are often built 
into the existing structure and are fixed components. Replacing them 
would require altering the size of the opening, which would generally 
be cost-prohibitive. Due to these constraints, replacement products 
must fit into existing sleeves, which clearly limit product height and 
width. Increases in product depth can be limited by the design of the 
sleeve, and consumers may be unwilling to accept products that extend 
further into the interior. DOE also notes that any increases in product 
depth would present very limited potential in improvement, because it 
would not allow for the unit's heat exchangers to grow in width or 
height.
    For these reasons, DOE has chosen to retain the preliminary 
analysis assumption for non-louvered products that size increase cannot 
be used to increase efficiency.

Louvered Room Air Conditioner Sizes

    DOE received the following comments from stakeholders on room air 
conditioner sizes for louvered products. AHAM commented that there are 
a range of product depths and weights, which may suggest that increased 
depths and weights may be feasible. (AHAM, No. 25 at pp. 6-7) AHAM 
noted, however, that UL requirements are an issue when considering 
increases in room air conditioner depth, as the units require that 
mounting brackets be designed to ensure that the room air conditioner 
remains in the window. Ensuring that these brackets are used in each 
installation can be a potential safety concern, in particular for 
smaller units installed by consumers. Id. AHAM also noted that smaller 
products (especially those in product classes 1 (room air conditioners 
without reverse cycle, with louvered sides, and capacities less than 
6,000 Btu/h) and 2 (room air conditioners without reverse cycle, with 
louvered sides, and capacities 6,000 to 7,999 Btu/h)) would be most 
negatively impacted by an increase in weight. AHAM indicated that the 
Occupational Safety and Health Administration (OSHA) recommends an 
additional person for lifting and installing products weighing over 50 
lbs. AHAM stated that the 50-lb. limit is expected to influence 
consumer acceptance of these products. Id.
    NPCC recommended that DOE compare the maximum unit dimensions in 
each analyzed product class to the dimensions of the highest efficiency 
model available on the market. (NPCC, No. 32 at pp. 4-5) NPCC 
recommended that, if these two product dimensions are similar, DOE 
assume that all units can be equally as large. NPCC also recommended 
that, if the market unit is smaller than the unit proposed by DOE, that 
DOE determine whether a redesign of the proposed unit would eliminate 
the size constraint. (Id.) DOE received no additional stakeholder 
comments addressing maximum acceptable product sizes for louvered 
products.
    DOE has chosen to use the 50-lb. weight limitation for product 
class 1 (room air conditioners without reverse cycle, without louvered 
sides, and capacities less than 6,000 Btu/h). The National Institute 
for Occupational Safety and Health (NIOSH) and OSHA guidance recommends 
against handling loads greater than 50 lbs. for a single person. NIOSH 
lists among its hazard evaluation checklist the handling of loads 
exceeding 50 lbs. as a risk factor used to identify potential 
problems.\37\ OSHA, in its ``Ergonomics eTool: Solutions for Electrical 
Contractors,'' states that lifting loads heavier than 50 lbs will 
increase the risk of injury, and recommends use of more than one person 
to lift weights larger than 50 lbs.\38\ These guidelines calling for 
additional personnel for product lifting represent distinct changes in 
consumer utility for products that currently weigh less than 50 lbs. 
This would not be true for products that already exceed this limit. DOE 
notes that all but the smallest room air conditioners weigh more than 
50 lbs. The baseline R-410A designs of the analyses were all determined 
to have weights greater than this limit, except for product class 1 
(room air conditioners without reverse cycle, with louvered sides, and 
capacities less than 6,000 Btu/h). DOE adjusted the analysis for 
product class 1 to limit its weight to 50 lbs., but did not make 
similar adjustments for any of the other product classes. Additional 
details regarding these adjustments for the product class

[[Page 22506]]

1 analysis is presented in chapter 5 of the direct final rule TSD.
---------------------------------------------------------------------------

    \37\ http://www.cdc.gov/niosh/docs/2007-131/.
    \38\ http://www.osha.gov/SLTC/etools/electricalcontractors/materials/heavy.html.
---------------------------------------------------------------------------

    For the other product classes with louvered sides, the maximum 
height and width considered is consistent with these dimensions for 
max-tech available products. These are the dimensions that determine 
that available size for heat exchangers; DOE's analysis of product 
classes with louvered sides contains heat exchangers with the same 
dimensions as max-tech available units. DOE observed that all max-tech 
products for room air conditioners are produced primarily by one 
manufacturer, and that the depth of these max-tech available products 
was much greater in proportion to other dimensions than the depths 
observed in other manufacturers' products. DOE's analysis indicated 
that depths consistent with the proportions observed in these other 
manufacturers' non-max-tech products are sufficient to provide max-tech 
performance. In particular, DOE's analysis indicated that the smaller 
depth was enough to achieve the requisite condenser airflow, enabling 
appropriate heat transfer by the larger heat exchangers. Thus, DOE's 
analyses did not use the larger product depths observed in the max-tech 
available products. Instead, DOE used smaller product depths, 
consistent with the proportions observed in other products. This 
approach was adopted for product classes 3 (room air conditioners 
without reverse cycle, with louvered sides, and capacities 8,000 to 
13,999 Btu/h); 5A (room air conditioners without reverse cycle, with 
louvered sides, and capacities 20,000 to 27,999 Btu/h); and 5B (room 
air conditioners without reverse cycle, with louvered sides, and 
capacities 28,000 Btu/h or more). Additional details of this analysis 
are available in chapter 5 of the direct final rule TSD.

Engineering Analysis Adjustments

    A summary table of the key adjustments made to the product class 
structure and the engineering analysis during the final rule phase of 
the rulemaking is presented in Table IV.30.

 Table IV.30--Summary of Key Adjustments to the Engineering Analysis for
                          Room Air Conditioners
------------------------------------------------------------------------
                                                       Changes for the
          Parameter                Preliminary        direct final rule
------------------------------------------------------------------------
Product Classes.............  No changes            Split of product
                               considered.           classes 5 and 8
                                                     into two product
                                                     classes each (5A,
                                                     5B, 8A, 8B) based
                                                     on stakeholder
                                                     comments.
Compressor Efficiency.......  Based on available    Max-efficiency
                               compressor data       increased to 10 EER
                               during preliminary    for product classes
                               analysis.             1, 3, 8A, and 8B,
                                                     and 10.3 EER for
                                                     product classes 5A
                                                     and 5B.
50 lbs Limit................  Not considered......  Introduced a 50 lb
                                                     weight limit for
                                                     the analysis of
                                                     design options for
                                                     product class 1.
Chassis Sizes for Louvered    Based on analysis of  Adjusted based on
 Products.                     HCFC-22 units.        additional market
                                                     research and
                                                     teardowns of R-410A
                                                     units.
Scroll Compressors..........  Considered for        Not considered,
                               product class 5       since they provide
                               analysis.             no additional
                                                     improvement over
                                                     10.3 EER rotary
                                                     compressors, and
                                                     are much more
                                                     expensive. This
                                                     design option is
                                                     less cost-effective
                                                     than the design
                                                     options selected by
                                                     DOE for analysis,
                                                     so it was not
                                                     considered.
------------------------------------------------------------------------

D. Markups Analysis

    The markups analysis develops appropriate markups in the 
distribution chain to convert the estimates of manufacturer cost 
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. DOE estimated the markups 
associated with the main parties in the distribution channel. For 
clothes dryers and room air conditioners, these are manufacturers and 
retailers.
    DOE developed an average manufacturer markup by examining the 
annual Securities and Exchange Commission (SEC) 10-K reports filed by 
four publicly traded manufacturers primarily engaged in appliance 
manufacturing and whose combined product range includes residential 
clothes dryers and room air conditioners.
    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 manufacturer sales price of higher-
efficiency models to the change in the retailer sales price.
    Commenting on the preliminary TSD, AHAM filed comments that 
criticized DOE's application of ``incremental'' markups to the 
incremental manufacturer selling price of products more efficient than 
the baseline products. (AHAM, No. 25 at p. 3) In Exhibit B accompanying 
this comment, AHAM stated that (1) DOE provides no empirical evidence 
to validate that retailers obtain only incremental markups on products 
with greater features and costs; and (2) DOE is asserting a normative 
approach without any support showing that its model reflects actual 
retail practices. These comments criticized two of the key assumptions 
in DOE's theoretical construct: (1) That the costs incurred by 
appliance retailers can be divided into costs that vary in proportion 
to the MSP (variable costs), and costs that do not vary with the MSP 
(fixed costs); (2) that retailer prices vary in proportion to retailer 
costs included in the balance sheets.
    Regarding the first assumption, AHAM stated that DOE has offered no 
evidence that the fixed/variable cost mix of a retailer has anything to 
do in practice with the markups that will be earned by a retailer on 
products that meet a new energy conservation standard. It added that 
DOE uses an incorrect analogy to HVAC contractors as a basis for 
considering the costs of a retailer, and that DOE did not analyze the 
actual drivers of retail costs. The retail cost structure has 
considerably different characteristics than those of an HVAC 
contractor. AHAM stated that DOE has not presented any data or analysis 
that would yield a fixed versus variable cost allocation applicable to 
retailers. Regarding DOE's second assumption, AHAM stated that DOE's 
approach depends on the presence of a relatively high level of 
competition in the retail industry. AHAM presented data showing that 
the four firm

[[Page 22507]]

concentration ratio (FFCR) of the sectors that sell major appliances 
ranges from 42 to 65 percent, which does not support DOE's assumption 
of a high level of competition in the retail industry.\39\
---------------------------------------------------------------------------

    \39\ The FFCR represents the market share of the four largest 
firms in the relevant sector. Generally, an FFCR of less than 40 
percent indicates that a sector is not concentrated and an FFCR of 
more than 70 percent indicates that a sector is highly concentrated.
---------------------------------------------------------------------------

    In conclusion, AHAM viewed DOE's incremental markup approach as 
lacking a credible theoretical underpinning and demonstrated 
reliability and asserted that the data required for the approach are 
not available. AHAM stated that DOE should return to its traditional 
practice of using average markups for both the baseline products and 
for the added costs of efficiency improvements. In AHAM's view, the 
stability of markups in the retailing sectors leads to the reasonable 
inference that such markups will continue and apply to higher-
efficiency products in the future when they become the bulk of sales 
under amended standards. (AHAM, No. 34, Exhibit B, p. 12)
    In response to the above comments, DOE extensively reviewed its 
incremental markup approach. DOE assembled and analyzed relevant data 
from other retail sectors and found that empirical evidence is lacking 
with respect to appliance retailer markup practices when a product 
increases in cost due to increased efficiency or other factors. DOE 
understands that real-world retailer markup practices vary depending on 
market conditions and on the magnitude of the change in cost of goods 
sold (CGS) associated with an increase in appliance efficiency.
    Given this uncertainty with respect to actual markup practices in 
appliance retailing, DOE uses an approach that reflects two key 
concepts. First, changes in the efficiency of the appliances sold are 
not expected to increase retailers' economic profits. Thus, DOE 
calculates markups/gross margins to allow cost recovery for retailers 
(including changes in the cost of capital) without changes in company 
profits. Second, efficiency improvements only impact some distribution 
costs. DOE sets markups to cover only the variable costs expected to 
change with efficiency.
    Market competition is another reason why DOE believes that profit 
margins would not change in a significant way. Regarding AHAM's 
assertion that the degree of competition in appliance retailing is not 
sufficient to support DOE's model, DOE believes that AHAM's measure of 
competition is inaccurate. AHAM measured the FFCR of three retail 
channels: Electronics and appliance stores, building material and 
supplies dealers, and general merchandise stores. These values 
represent competitiveness within each sector, but clothes dryers and 
room air conditioners are sold across all three sectors, preventing 
major retailers in each sector from exercising significant market 
power. To properly measure the competitiveness within appliance 
retailing, DOE believes that one should measure the FFCR for only the 
appliance subsector within the above channels and accordingly estimated 
the ``appliance sales'' FFCR as equal to the sector FFCR times the 
percent of appliance sales within each sector. DOE estimated that these 
sub-sector FFCRs are under the 40 percent threshold. Furthermore, 
``Household Appliance Stores,'' a subsector of the electronics and 
appliance stores sector that specifically represents appliance 
retailers, rather than computer or other electronics stores, has an 
FFCR of 17 percent, signifying an unconcentrated sector.
    DOE's separation of operating expenses into fixed and variable 
components to estimate an incremental markup follows from the above 
concepts. In separating retailer costs, DOE did not directly use 
information from the HVAC contractor industry. Instead, DOE defined 
fixed expenses as including labor and occupancy expenses because these 
costs are not likely to increase as a result of a rise in CGS due to 
amended efficiency standards. All other expenses, as well as the net 
profit, are assumed to vary in proportion to the change in CGS. DOE's 
method results in an outcome in which retailers are assumed to cover 
their costs while maintaining their profit margins when the CGS of 
appliances changes. DOE seeks additional information from interested 
parties to help refine its allocation approach.
    Regarding AHAM's observation about the relative stability of 
average markups for the major retail channels that sell home 
appliances, DOE believes that the usefulness of this information for 
estimating markups on specific product lines is limited. The markups 
implied by gross margin at the level of major retail channels \40\ are 
averaged over multiple product lines and many different store types. 
The empirical data at this level do not provide useful guidance for 
estimating what happens to the markup on specific products when their 
costs change. Applying the same markup as CGS increases, as AHAM 
recommends, would mean that the increase in CGS associated with higher-
efficiency products would translate into higher retail gross margins 
for that product line. Because the majority of operating expenses would 
not be affected by the increase in CGS, the result would be an increase 
in net profit as a share of sales. While such an outcome could occur in 
the short run, DOE believes that competitive forces in the market would 
tend to decrease the profit margin over time.
---------------------------------------------------------------------------

    \40\ The channels for which AHAM provided gross margin data for 
1993-2007 are electronics and appliance stores, general merchandise 
stores, and building material and supplies dealers. According to 
AHAM, these channels accounted for 43 percent, 31 percent and 17 
percent of major appliance sales in 2007, respectively.
---------------------------------------------------------------------------

    Based on the above considerations, DOE has decided to continue to 
apply an incremental markup to the incremental MSP of products with 
higher efficiency than the baseline products. As part of its review, 
DOE developed a new breakdown into fixed and variable components using 
the latest expense data provided by the U.S. Census for Electronics and 
Appliance Stores, which cover 2002. The newly-derived incremental 
markup, which would be applied to an incremental change in CGS, is 
1.17, which is slightly higher than the value of 1.15 that DOE used in 
the preliminary analysis. Chapter 6 of the direct final rule TSD 
provides a description of both the method and its current application 
using the aforementioned data.

E. Energy Use Analysis

    DOE's analysis of the energy use of clothes dryers and room air 
conditioners estimated the energy use of these products in the field, 
that is, as they are actually used by consumers. The energy use 
analysis provided the basis for other analyses DOE performed, 
particularly assessments of the energy savings and the savings in 
consumer operating costs that could result from DOE's adoption of 
amended standards. In contrast to the DOE test procedure, which 
provides a measure of the energy use, energy efficiency or annual 
operating cost of a covered product during a representative average use 
cycle or period of use, the energy use analysis seeks to capture the 
range of operating conditions for clothes dryers and room air 
conditioners in U.S. homes.
    To determine the field energy use of products that would meet 
possible amended standard levels, DOE used data from the EIA's 2005 
RECS, which was the most recent such survey

[[Page 22508]]

available at the time of DOE's analysis.\41\ 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. RECS provides sufficient information to establish the type 
(product class) of clothes dryer or room air conditioner used in each 
household. As a result, DOE was able to develop household samples for 
each of the considered product classes. DOE developed a separate 
building sample for commercial-sector use of room air conditioners and 
accounted for the distinct features of room air conditioner utilization 
in commercial buildings.
---------------------------------------------------------------------------

    \41\ For information on RECS, see http://www.eia.doe.gov/emeu/recs/.
---------------------------------------------------------------------------

    A more detailed description of DOE's energy use analysis for 
clothes dryers and room air conditioners is contained in chapter 7 of 
the direct final rule TSD.
1. Clothes Dryers
    For clothes dryers with a specific efficiency, the annual energy 
consumption depends on the annual number of cycles. In the preliminary 
analysis, DOE used a distribution of values with an average of 283 
cycles/year based on RECS data. Whirlpool stated that a range of 278-
300 annual dryer cycles is reasonable, based on P&G data which indicate 
278 annual dryer cycles, and internal data which indicate 288 annual 
dryer cycles. (Whirlpool, No. 22 at p. 3) AHAM stated that P&G data 
indicate 278 annual dryer loads, which verifies the RECS data. (AHAM, 
No. 25 at p. 9) DOE acknowledges the above comments and has retained 
the approach used in the preliminary analysis, which resulted in an 
average of 283 cycles/year, for its final rule analysis. This average 
value matches the number of cycles/yr in the most current DOE clothes 
dryers test procedure and is within the range of the values submitted 
by the commenters.
    In the preliminary analysis, DOE estimated that clothes dryers take 
on average 60 minutes to complete a cycle. EEI stated that DOE should 
consider manufacturer data, consumer reports, or data from other third 
parties to determine typical cycle time for clothes dryers. (EEI, 
Public Meeting Transcript, No. 21.4 at pp. 106-107) ALS stated that 
cycle time should be derived based on RMC, assuming that a sensor will 
be included in all future models. (ALS, Public Meeting Transcript, No. 
21.4 at pp. 110-111) NRDC stated that there is a 20-minute variation in 
cycle time, based on whether the sensors work accurately. (NRDC, Public 
Meeting Transcript, No. 21.4 at p. 106) The NRDC/ECOS report stated 
that a typical drying cycle is much different than the constant drying 
cycle duration fixed at 60 minutes that is used in the LCC. (NRDC, No. 
30 at p. 11)
    DOE acknowledges that there is variation in cycle time and that it 
is dependent on the RMC and the sensors' accuracy. In the final rule 
analysis, DOE revised the cycle time to match the most current DOE test 
procedure average value of 30 minutes. Overall, the cycle time has very 
little impact on the calculation of energy use because it is only used 
for the determination of standby energy use.
    In the preliminary analysis, DOE assigned an RMC value to each 
sample unit using a distribution of clothes washer RMC values from the 
CEC directory \42\ ranging from 30 percent to 61 percent, with an 
average of 46 percent. In response, AHAM suggested DOE use a RMC value 
of 47 percent because it is representative of products likely to be 
sold in the 2015 timeframe. (AHAM, No. 25 at pp. 9-10) Whirlpool stated 
that they support the use of AHAM data, which indicate a shipment-
weighted average RMC of 47 percent. (Whirlpool, No. 22 at p. 4)
---------------------------------------------------------------------------

    \42\ California Energy Commission. Appliance Efficiency 
Database: Clothes Washers. July 2010. URL: http://www.appliances.energy.ca.gov/.
---------------------------------------------------------------------------

    In its analysis for the final rule, DOE incorporated new 
information about the RMC value developed during DOE's recent clothes 
dryers test procedure rulemaking. In response to comments on the 
clothes dryers test procedure NOPR, DOE issued an SNOPR in which it 
proposed a revision of the average RMC value. FR 75 37594 (June 29, 
2010). The revision addresses the fact that the RMC values listed in 
the CEC directory are multiplied by a correction factor and therefore 
do not represent the actual cloth moisture content at the end of the 
clothes washer spin cycle. In keeping with this revision, for the final 
rule analysis DOE used a distribution of clothes washer RMC values from 
the CEC directory multiplied by a correction factor to match the 
average RMC value of 57.5 percent assumed in the proposed test 
procedure.
    In the preliminary analysis, DOE assigned load weights to each 
sample household by developing a distribution based on the CEC 
directory. The average load weights for standard-size units ranged from 
5.1 lbs. to 10 lbs., with a mean value of 8.1 lbs.
    AHAM stated that the shipment-weighted residential clothes washer 
drum volume for standard size products in 2008 was 3.24 ft\3\, which 
corresponds to an average load size of 8.15 lbs., which is consistent 
with the value proposed by DOE, using the alternative CEC approach. 
AHAM also stated that the load size should be 4.70 lbs. for compact 
clothes dryers, based on the shipment-weighted drum volume of 1.5 
ft\3\. (AHAM, No. 25 at p. 10) BSH stated that load size should 
increase linearly with drum size. (BSH, No. 23 at p. 5) The NRDC/ECOS 
Report suggested that the values used in the preliminary analysis may 
be too low. It stated that today's dryers can comfortably accommodate 
loads between 10 and 17 lbs., and that there are more dryer models on 
the market today between 7 and 8 ft\3\ than there are models smaller 
than 7 ft\3\. (NRDC, No. 30 at p. 35)
    In its analysis for the final rule, DOE used the average load size 
value of 8.45 lbs. from the TP Final Rule. To represent a range of load 
size values in the field, DOE used a distribution of load sizes ranging 
from 3.80 to 13.7 lbs., with a mean value of 8.45 lbs. Chapter 7 of the 
TSD presents the details of the DOE's load size analysis.
    DOE received several comments recommending that it use the same 
values for number of cycles, RMC, and load weights in both the 
engineering analysis and the LCC and PBP analysis, and that it revise 
the test procedure to reflect the values used in its analysis. (AHAM, 
No. 25 at pp. 9-10; Whirlpool, No. 22 at pp. 3-4) The California 
Utilities stated that DOE should consider all changes in the test 
procedure in additional analysis of clothes dryer energy use. 
(California Utilities, No. 31 at p. 13)
    For its LCC and payback period analysis DOE developed distributions 
of values for number of cycles, RMC, and load weights that reflect its 
best estimate of the range of practices found in U.S. homes. In the 
engineering analysis, DOE uses the test procedure to evaluate the 
relative improvement in energy efficiency provided by different design 
options. As discussed in section III.A, DOE has modified the clothes 
dryer test procedure to reflect current field conditions, and these 
changes are also incorporated in the analysis for the final rule.
    In the preliminary analysis, DOE estimated an average energy use of 
519 kWh per year for the baseline vented electric standard clothes 
dryer. ACEEE stated that DOE should revisit the approach to determining 
annual energy consumption, and it noted that the baseline average unit 
energy consumption (UEC) of 519 kWh/year in DOE's analysis is much 
lower than the values found in field studies and

[[Page 22509]]

metered evaluations of clothes dryer models. (ACEEE, No. 24 at p. 2) 
The California Utilities stated that a Florida Solar Energy Center 
survey found that field-average UEC for electric standard clothes 
dryers was around 900 kWh/year, the 2001 RECS lists 1079 kWh/year, and 
a 1999 Progress Energy Florida study shows 885 kWh/year. They noted 
that these numbers are significantly higher than DOE's average UEC. 
(California Utilities, No. 31 at p. 12)
    As described above, DOE made several changes to its approach for 
estimating clothes dryer energy use for the final rule (increased 
initial RMC value and clothes dryer load size). As a result, the 
average annual energy use for the baseline vented electric clothes 
dryer derived for the final rule is 718 kWh. This value is lower than 
those found in the surveys mentioned above primarily because it 
reflects more recent clothes washer technology and clothes dryer 
utilization than the surveys discussed in the comment. In particular, 
this value reflects the lower initial RMC associated with newer clothes 
washers and the lower number of clothes dryer cycles per year seen in 
recent P&G data and 2005 RECS data. The value from 2001 RECS was 
derived using conditional demand analysis that utilized assumptions 
based on the previous clothes dryer test procedure. The Florida surveys 
date from 1999, when initial RMC and annual number of dryer cycles were 
higher significantly higher than the values used in the final rule 
analysis. In addition, the sample size of these surveys is small and 
not necessarily representative of the nation.
    In the preliminary analysis, DOE considered the impact of clothes 
dryer operation on home heating and cooling loads. A clothes dryer 
releases heat to the surrounding environment. If the dryer is located 
indoors, its use will tend to slightly reduce the heating load during 
the heating season and slightly increase the cooling load during the 
cooling season. DOE believed that the effect is the same for all of the 
considered efficiency levels because the amount of air passing through 
the clothes dryer does not vary, and thus it did not include this 
factor in its preliminary analysis.
    ACEEE, NRDC, NEEP and NPCC and the California Utilities stated that 
DOE should consider the impact on space conditioning loads from clothes 
dryer use. (ACEEE, No. 24 at p. 2; NRDC, No. 26 at p. 2; NEEP, No. 27 
at p. 3; NPCC, No. 32 at p. 3; California Utilities, No. 31 at p. 9) 
The California Utilities stated that the HVAC load created by dryers 
can amount to as much as 3 kWh/cycle. (California Utilities, No. 31 at 
p. 9)
    As discussed in section III.A.1, DOE believes that accounting for 
the effects of clothes dryers on HVAC energy use in a DOE test 
procedure is inconsistent with the EPCA requirement that a test 
procedure measure the energy efficiency, energy use, or estimated 
annual operating cost of a covered product. As a result, DOE did not 
consider the impact of standards on HVAC energy use, is permissible 
under 42 U.S.C. 6295(o) in developing the energy conservation standards 
established in today's direct final rule.
    To calculate this impact, DOE first estimated whether the clothes 
dryer in a RECS sample home is located in conditioned space (referred 
to as indoors) or in unconditioned space (such as garages, 
unconditioned basements, outdoor utility closets, or attics). Based on 
the 2005 RECS and the 2009 American Housing Survey (AHS), DOE assumed 
that 50 percent of vented standard electric and gas dryers are located 
indoors, while 100 percent of compact and ventless clothes dryers are 
located indoors. For these installations, DOE utilized the results from 
a European Union study about the impacts of clothes dryers on home 
heating and cooling loads to determine a the appropriate factor to 
apply to the total clothes dryer energy use.\43\ This study reported 
that for vented dryers there is a factor of negative 3 to 9 percent 
(average 6 percent) and for ventless dryers there is a factor of 
positive 7 to 15 percent (average 11 percent). For the reasons stated 
earlier, DOE assumed that the effect is the same for all considered 
efficiency levels.
---------------------------------------------------------------------------

    \43\ R[uuml]denauer, Ina and Gensch, Carl-Otto. Energy demand of 
tumble dryers with respect to differences in technology and ambient 
conditions. Report commissioned by European Committee of Domestic 
Equipment Manufacturers (CECED). January 13, 2004.
---------------------------------------------------------------------------

2. Room Air Conditioners
    For room air conditioners with a specific size and EER, the annual 
energy use depends on the annual hours of operation. In the preliminary 
analysis, for units in the residential sector, DOE calculated the 
number of operating hours for each room air conditioner in the 
residential sample using the reported energy use for room air 
conditioning in the 2005 RECS, along with estimates of the EER of the 
room air conditioner(s) in each sample home. DOE based the latter on 
the reported age of the unit and historical data on shipment-weighted 
average EER.
    For units used in the commercial sector, DOE calculated the number 
of operating hours for each room air conditioner in the commercial 
sample by establishing a relationship between cooling degree-days and 
operating hours for a number of building types and building schedule 
combinations. DOE assumed that a room air conditioner is operated when 
the outdoor air conditions are above the comfort zone described by 
ANSI/ASHRAE Standard 55-2004 Thermal Environmental Conditions for Human 
Occupancy. For a given location, the number of annual hours above the 
ASHRAE Standard 55 comfort zone varies by building operating schedule, 
which refers to the time that a building is in operation.
    AHAM stated that it opposes the use of RECS and CBECS data to 
estimate energy consumption of room air conditioners in the LCC and 
payback period calculations, and it requested confirmation that DOE's 
estimates for both residential and commercial room air conditioner use 
are realistic. (AHAM, No. 25 at pp. 8-9) AHAM questioned the validity 
of DOE's analysis for residential use of room air conditioners. AHAM 
stated that RECS data do not provide information on room air 
conditioner capacity or a direct measurement of room air conditioner 
energy use. (AHAM, No. 25 at p. 2) AHAM also questioned DOE's estimate 
of the capacity of the unit (or units) based on the reported total 
cooled area, as well as the approach DOE used to distribute the 
capacity sizes among the various product classes evaluated. (AHAM, No. 
25 at pp. 8-9)
    Regarding the use of RECS data to estimate the capacity of the unit 
(or units), DOE believes that the reported total cooled area is an 
important indicator of the capacity of the unit (or units). The reason 
is that for room air conditioners this is the primary sizing criteria 
used by manufacturers, contractors, and programs such as ENERGY STAR. 
Therefore, DOE continued to use reported total cooled area to estimate 
the room air conditioner capacity. To improve the accuracy of the 
estimate, for the final rule DOE also considered additional factors 
that are likely to influence the capacity selection: The number of 
occupants, local weather, and building characteristics such as envelope 
insulation and shading. In addition, for the final rule analysis DOE 
revised its criteria for assigning room air conditioner units for the 
RECS household sample associated with each product class. DOE took into 
consideration AHAM's suggestion and did not assign smaller-size units 
in the sample for the largest product class.
    In addition to the above changes, DOE applied an adjustment to the 
values for annual operating hours derived from the

[[Page 22510]]

2005 RECS to account for the warmer-than-average weather in 2005. (DOE 
used long-term national average cooling degree-day values as a basis 
for the adjustment). DOE also adjusted the values to account for the 
fact that the stock of homes in 2014 is likely to have slightly more 
floor area and have better insulation than homes in 2005. DOE based the 
adjustment on projections in AEO2010. These modifications are described 
in chapter 7 of the direct final rule TSD.
    Regarding DOE's use of CBECS for estimating the commercial use of 
room air conditioners, AHAM stated that (1) DOE made substantial 
assumptions regarding the number of room air conditioners per 
commercial application and the room air conditioner capacities employed 
at these locations; and (2) it appears that DOE, to obtain enough data 
for statistical analysis, overlapped the units in each product class. 
(That is, units calculated as having > 20,000 Btu/hr capacity have also 
been included in the analysis of the < 6,000 Btu/hr and 8,000-13,999 
Btu/hr product classes.) It stated that the latter approach is 
misleading and unacceptable. (AHAM, No. 25 at p. 3)
    DOE believes that the assumptions made in the preliminary analysis 
are consistent with the CBECS and AHAM shipments data that are 
available for evaluating commercial use of room air conditioners. 
Therefore, DOE retained the approach used in the preliminary analysis 
for the final rule analysis. Regarding the overlapping of units among 
product classes, DOE believes that its approach is reasonable given 
that there is no information available on the number of air conditioner 
units in a building, so a building could have one or more units in any 
of the considered product classes.
    AHAM stated that DOE's approach for estimating room air conditioner 
energy use is not consistent with the law, which requires that the test 
procedure be used to determine energy use and energy savings. (AHAM, 
No. 25 at p. 2) AHAM elaborated on this statement and made arguments 
that can be summarized as follows (AHAM, No. 25 at pp. 7-8):
    1. While use of RECS data has proven useful over the years to 
provide general guidance to DOE on residential energy use, this is the 
first time that DOE proposes to use it to estimate actual energy 
consumption in the field and to justify a new energy efficiency 
standard;
    2. It is inconsistent for DOE to use RECS data and statistical 
regression techniques to estimate energy use for determining the life 
cycle cost and payback period used to justify an appliance standard, 
while it uses the applicable test procedure as the sole source of 
energy use data for purposes of determining compliance with the 
standard.
    3. Reliance on the test procedure for the energy data used in LCC 
and payback period calculations to set new appliance standards is the 
tried and true method that has a clear statutory basis.
    4. The law on labeling prohibits manufacturers, distributors, and 
retailers from making energy use representations about their products 
based on anything other than the results of a test procedure, so it is 
irrational if DOE's analysis makes energy claims that sellers cannot 
make.
    AHAM also stated that DOE should use 750 annual operating hours 
(the value in the current test procedure) to maintain consistency while 
additional surveys or testing are completed to determine a 
representative number of annual operating hours. (AHAM, No. 25 at p. 9)
    In response, DOE notes that EPCA specifies particular uses of the 
applicable test procedure, such as when DOE ascertains whether the 
consumer costs associated with the purchase of a product that complies 
with the proposed standard level is less than three times the value of 
the energy savings the consumer will receive during the first year of 
ownership. (42 U.S.C. 6295(o)(2)(B)(iii)) This calculation is separate 
from the payback periods calculated in the LCC and payback period 
analysis. The latter analysis helps DOE to evaluate two of the factors 
that EPCA directs DOE to consider in determining whether an energy 
conservation standard for a particular covered product is economically 
justified. The first of these is the economic impact of potential 
standards on the manufacturers and the consumers of the covered 
products. (42 U.S.C. 6295(o)(2)(B)(i)(I)) The second factor is the 
savings in operating costs throughout the estimated average life of the 
covered product in the type (or class) compared to any increase in the 
price of, or in the initial charges for, or maintenance expenses of, 
the covered products which are likely to result from the imposition of 
the standard. (42 U.S.C. 6295(o)(2)(B)(i)(II))
    To evaluate economic impacts on consumers and the savings in 
operating costs as accurately as possible, DOE needs to determine the 
energy savings that are likely to result from a given standard. Such a 
determination requires knowledge of the range of actual use of covered 
products by consumers. Because it is a recent nationally-representative 
survey of U.S. households, RECS provides information that helps DOE to 
determine such use. In addition, DOE uses RECS data because it is 
consistent with the guidance contained in 10 CFR part 430, subpart C, 
appendix A--``Procedures, Interpretations and Policies for 
Consideration of New or Revised Energy Conservation Standards for 
Consumer Products.'' Specifically, section 11 of appendix A lists 
variation in consumer impacts as one of the principles for the analysis 
of impacts on consumers. Because RECS provides considerable information 
about each household in the sample, it allows DOE to evaluate factors 
that contribute to variation in the energy use of covered products. In 
turn, this allows DOE to estimate the fraction of consumers that will 
benefit from standards at various efficiency levels.
    Consistent with the EPCA and DOE's regulatory guidance, DOE has 
used RECS data in a variety of ways over the past decade. In most 
cases, DOE has used the relevant DOE test procedure or a similar 
procedure as the basis for the energy use calculation, and used RECS 
data to provide a range for key input variables concerning the 
operation of covered products. Examples include the standards 
rulemaking for water heaters concluded in 2001 (66 FR 4474 (Jan. 17, 
2001)), and the recently-concluded rulemaking that amended standards 
for water heaters. 75 FR 20112, 20112-20236 (Apr. 16, 2010). In both 
rulemakings, DOE used data for each of the households in the RECS 
sample to estimate the amount of household daily hot water use, and to 
specify certain factors that affect water heater operating conditions. 
Additionally, DOE's 2001 final rule for central air conditioners and 
heat pumps relied on annual energy use based on the annual end-use 
energy consumption values in RECS. 66 FR 7070, 7170-7200 (Jan. 22, 
2001). DOE determined that basing the energy use on RECS household data 
provided an accurate measure of the savings possible from more-
efficient equipment, and accounted for variability due to climatic 
conditions and consumer behavior.
    Regarding AHAM's suggestion that DOE should use the test procedure 
only to estimate energy use for the purposes of its analysis of 
standards, DOE notes that test procedures must be designed to produce 
test results which measure energy efficiency, energy use or estimated 
annual operating cost of a covered product during a representative 
average use cycle or period of use. (42 U.S.C. 6293(b)(3)) For the 
purposes of evaluating two of the factors that EPCA directs DOE to 
consider in determining whether an energy conservation

[[Page 22511]]

standard for covered products is economically justified, determining 
energy use based on only a representative average use cycle or period 
of use does not provide an accurate measure of the range of possible 
energy savings. Thus, doing so would not be consistent with EPCA and 
the above-cited guidance of appendix A to subpart C of part 430.
    In addition, EPCA requires that manufacturers and DOE use the DOE 
test procedures prescribed pursuant to 42 U.S.C. 6293 in determining 
compliance. Determining compliance requires a metric that provides 
repeatable and consistent results for appliances in a given product 
class, a purpose best served by the test procedure. Similarly, energy 
labeling of appliances is designed to provide consumers with 
information that allows comparison of the technical performance of 
different products with respect to energy efficiency. Measurement of 
such performance is best conducted with a standard metric such as the 
applicable test procedure. The LCC and PBP analysis, in contrast, seeks 
to estimate the impact of alternative standard levels on consumers. 
This requires an evaluation of variation in energy use in the field, 
which is provided by analysis of the RECS data.
    DOE included a ``rebound effect'' in its analysis of room air 
conditioner energy use. A rebound effect could occur when a piece of 
equipment that is more efficient is used more intensively, so that the 
expected energy savings from the efficiency improvement may not fully 
materialize. A rebound effect of 10 percent implies that 90 percent of 
the expected energy savings from more efficient equipment will actually 
occur. Based on the data available,\44\ DOE incorporated a rebound 
effect of 15 percent for room air conditioners in the analysis for the 
final rule.
---------------------------------------------------------------------------

    \44\ S. Sorrell, J. Dimitropoulos, and M. Sommerville Empirical 
estimates of the direct rebound effect: A review Energy Policy, 2009 
37, pp. 1356-71.
---------------------------------------------------------------------------

F. Life-Cycle Cost and Payback Period Analyses

    DOE conducts LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
clothes dryers and room air conditioners. 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 (normally higher) due to a more stringent standard by the 
change in average annual operating cost (normally lower) that results 
from the standard.
    For any given efficiency level, DOE measures the PBP and the change 
in LCC relative to an estimate of the base-case appliance efficiency 
levels. 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.
    For each considered efficiency level in each product class, DOE 
calculated the LCC and PBP for a nationally representative set of 
housing units. For the preliminary analysis and the analysis for 
today's rule, DOE developed household samples from the 2005 RECS. For 
each sample household, DOE determined the energy consumption for the 
clothes dryer or room air conditioner and the appropriate electricity 
or natural gas 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 clothes dryers 
and room air conditioners. DOE developed a separate building sample for 
commercial-sector use of room air conditioners and accounted for the 
distinct features of room air conditioner utilization in commercial 
buildings.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes manufacturer costs, manufacturer 
markups, retailer and distributor markups, and sales taxes--and 
installation costs. Inputs to the calculation of operating expenses 
include annual energy consumption, energy 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 some inputs, with probabilities attached to 
each value, to account for their uncertainty and variability. DOE used 
probability distributions to characterize product lifetime, discount 
rates, and sales taxes.
    The computer model DOE uses to calculate the LCC and PBP, which 
incorporates Crystal Ball (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 clothes 
dryer and room air conditioner user samples. The model calculated the 
LCC and PBP for products at each efficiency level for 10,000 housing 
units per simulation run. Details of the spreadsheet model, and of all 
the inputs to the LCC and PBP analyses, are contained in chapter 8 of 
the direct final rule TSD and its appendices.
    Table IV.31 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The table provides the data and 
approach DOE used for the preliminary TSD, as well as the changes made 
for today's direct final rule. The subsections that follow discuss the 
initial inputs and methods and the changes DOE made for the final rule.

                    Table IV.31--Summary of Inputs and Methods in the LCC and PBP Analysis *
----------------------------------------------------------------------------------------------------------------
                Inputs                            Preliminary TSD                 Changes for the final rule
----------------------------------------------------------------------------------------------------------------
                                                 Installed Costs
----------------------------------------------------------------------------------------------------------------
Product Cost..........................  Derived by multiplying manufacturer  Used a product-specific price/cost
                                         cost by manufacturer and retailer    adjustment factor based on
                                         markups and sales tax, as            experience curves that forecasts
                                         appropriate.                         changes in price relative to
                                                                              inflation in the over-all economy.

[[Page 22512]]

 
Installation Costs....................  Based on RS Means, assumed no        Based on RS Means; included
                                         change with efficiency level.        additional installation cost for
                                                                              heat pump dryers and higher-
                                                                              efficiency room air conditioners
                                                                              due to their larger dimensions and
                                                                              weight.
----------------------------------------------------------------------------------------------------------------
                                                 Operating Costs
----------------------------------------------------------------------------------------------------------------
Annual Energy Use.....................  Clothes Dryers: Used DOE test        Clothes Dryers: Same approach, but
                                         procedure with data on cycles from   RMC and load weight revised to
                                         the 2005 RECS, market data on RMC,   account for proposed changes in
                                         and load weights from test           DOE test procedure.
                                         procedure.
                                        Room Air Conditioners: Based on      Room Air Conditioners: No change.
                                         calculation of operating hours for
                                         each 2005 RECS sample unit.
Energy Prices.........................  Electricity (clothes dryers): Based  Electricity (clothes dryers):
                                         on EIA's Form 861 data for 2007.     Updated using Form 861 data for
                                                                              2008.
                                        Electricity (room air                Electricity (room air
                                         conditioners): Used utility tariff   conditioners): No change.
                                         data to develop monthly marginal
                                         electricity prices for each sample
                                         household.
                                        Natural gas: Based on EIA's Natural  Natural gas: Updated using Natural
                                         Gas Monthly data for 2007.           Gas Monthly data for 2009.
                                        Variability: Regional energy prices  Variability: No change.
                                         determined for 13 regions for       ...................................
                                         clothes dryers; tariffs determined  ...................................
                                         for sample households for room air
                                         conditioners.
Energy Price Trends...................  Forecasted using AEO2009 price       Forecasts updated using AEO2010.
                                         forecasts.
Repair and Maintenance Costs..........  Not included.......................  Derived annualized maintenance and
                                                                              repair frequencies and costs per
                                                                              service call based on RS Means and
                                                                              equipment cost.
----------------------------------------------------------------------------------------------------------------
                                     Present Value of Operating Cost Savings
----------------------------------------------------------------------------------------------------------------
Product Lifetime......................  Estimated using survey results from  No change.
                                         RECS (1990, 1993, 1997, 2001,
                                         2005) 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........................  Identified all possible debt or      No change.
                                         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 and 2007.
Compliance Date.......................  2014...............................  No change.
----------------------------------------------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided in the sections following the table or in
  chapter 8 of the direct final rule TSD.
** Survey of Consumer Finances.

    As discussed in section IV.E, DOE takes into account the rebound 
effect associated with more efficient room air conditioners. The take-
back in energy consumption associated with the rebound effect provides 
consumers with increased value (for example, a cooler or warmer indoor 
environment). The net impact on consumers is thus the sum of the change 
in the cost of owning the room air conditioner (that is, life-cycle 
cost) and the increased value for the more comfortable indoor 
environment. The consumer effectively pays for the increased value of a 
more comfortable environment in his or her utility bill. Because the 
monetary cost of this added value is equivalent to the value of the 
foregone energy savings, the economic impacts on consumers measured in 
the LCC analysis are the same regardless of the rebound effect.
1. Product Cost
    To calculate consumer product costs, DOE multiplied the 
manufacturer selling prices 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, as discussed previously, DOE applies an incremental 
markup to the MSP increase associated with higher efficiency products.
    On February 22, 2011, DOE published a Notice of Data Availability 
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory 
analysis by addressing equipment price trends. Consistent with the 
NODA, DOE examined historical producer price indices (PPI) for room air 
conditioners and household laundry equipment and found a consistent, 
long-term declining real price trend for both products. Consistent with 
the method proposed in the NODA, DOE used experience curve fits to 
forecast a price scaling index to forecast product costs into the 
future for this rulemaking. DOE also considered the public comments 
that were received in response to the NODA and refined

[[Page 22513]]

the evaluation of its experience curve trend forecasting estimates. 
Many commenters were supportive of DOE moving from an assumption-based 
equipment price trend forecasting method to a data-driven methodology 
for forecasting price trends. Other commenters were skeptical that DOE 
could accurately forecast price trends given the many variables and 
factors that can complicate both the estimation and the interpretation 
of the numerical price trend results and the relationship between price 
and cost. DOE evaluated these concerns and determined that retaining 
the assumption-based approach of a constant real price trend was not 
consistent with the historical data for the products covered in this 
rule though this scenario does represent a reasonable upper bound on 
the future equipment price trend. DOE also performed an initial 
evaluation of the possibility of other factors complicating the 
estimation of the long-term price trend, and developed a range of 
potential price trend values that were consistent with the available 
data and justified by the amount of data available to DOE. DOE 
recognizes that its price trend forecasting methods are likely to be 
modified as more data and information becomes available to enhance the 
statistical certainty of the trend estimate and the completeness of the 
model. Additional data should enable an improved evaluation of the 
potential impacts of more of the factors that can influence equipment 
price trends over time.
    To evaluate the impact of the uncertainty of the price trend 
estimates, DOE performed price trend sensitivity calculations in the 
national impact analysis to examine the dependence of the analysis 
results--specifically annualized net national benefits--on different 
analytical assumptions. DOE also included a zero real price trend 
assumption as a sensitivity scenario representing an upper bound on the 
forecast price trend DOE found that for the selected standard levels 
the benefits outweighed the burdens under all scenarios.
    A more detailed discussion of price trend modeling and calculations 
is provided in Appendix 8-J of the TSD.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the equipment. For the 
preliminary analysis, DOE derived baseline installation costs for 
clothes dryers and room air conditioners from data in the RS Means 
2008. DOE found no evidence that installation costs would be impacted 
with increased efficiency levels. Commenting on DOE's assumption, 
Whirlpool stated that heat pump dryers would be considerably heavier 
than conventional dryers, leading to increased installation costs. 
(Whirlpool, No. 22 at p. 4) AHAM made a similar comment. (AHAM, Public 
Meeting Transcript, No. 21.4 at pp. 89-90)
    For the final rule analysis, DOE included an additional 
installation cost for heat pump dryers due to their larger dimensions 
and weight. DOE added 0.5 hour of additional labor (or about $20) to 
the installation cost. For room air conditioners, DOE also added 
additional labor hours for higher efficiency equipment with significant 
larger dimensions and/or weight based on RS Means labor hour estimates 
for room air conditioners with different capacities.
3. Annual Energy Consumption
    For each sampled household, DOE determined the energy consumption 
for a clothes dryer or room air conditioner at different efficiency 
levels using the approach described above in section IV.E.
4. Energy Prices
    For clothes dryers, DOE derived average annual energy prices for 13 
geographic areas consisting of the nine U.S. Census divisions, with 
four large states (New York, Florida, Texas, and California) treated 
separately. For Census divisions containing one of these large states, 
DOE calculated the regional average excluding the data for the large 
state.
    DOE calculated average residential electricity prices for each of 
the 13 geographic areas using data from EIA's Form EIA-861 Database 
(based on ``Annual Electric Power Industry Report'').\45\ 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. For the preliminary TSD, DOE used the data for 2007. The final 
rule analysis updated the data for 2008, the most recent data 
available.
---------------------------------------------------------------------------

    \45\ Available at: http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------

    DOE calculated average residential natural gas prices for each of 
the 13 geographic areas using data from EIA's ``Natural Gas Monthly.'' 
\46\ 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. For the 
preliminary TSD, DOE used EIA data for 2007. The final rule analysis 
updated the data for 2009, the most recent data available.
---------------------------------------------------------------------------

    \46\ Available at: http://www.eia.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.html.
---------------------------------------------------------------------------

    For the preliminary analysis, for room air conditioners DOE used 
utility tariff data to develop monthly marginal electricity prices for 
each sample household used in the LCC analysis. The marginal prices 
were calculated by taking account of the difference between the 
household's electricity expenditures for the base case electricity use 
and for a candidate standard level, in combination with the associated 
change in energy use expected as a result of a particular standard 
level. The price used was based on the default (non-TOU) tariffs, 
because TOU tariffs are optional and very few customers opt for such 
rates. DOE then applied the monthly prices to the estimated electricity 
use by the room air conditioner in each corresponding month. This 
approach applies summer rates to the estimated consumption in summer 
months. DOE also used tariff data to develop marginal electricity 
prices for each commercial building in the LCC sample. DOE used the 
same approach for today's final rule.
5. Energy Price Projections
    To estimate energy prices in future years for the preliminary TSD, 
DOE multiplied the above average regional energy prices by the forecast 
of annual average residential energy price changes in the Reference 
Case from AEO2009.\47\ AEO2009 forecasted prices through 2030. For 
today's proposed rule, DOE updated its energy price forecasts using 
AEO2010, which has an end year of 2035.\48\ To estimate the price 
trends after 2035, DOE used the average annual rate of change in prices 
from 2020 to 2035.
---------------------------------------------------------------------------

    \47\ The spreadsheet tool that DOE used to conduct the LCC and 
PBP analyses allows users to select price forecasts from either 
AEO's High Economic Growth or Low Economic Growth Cases. Users can 
thereby estimate the sensitivity of the LCC and PBP results to 
different energy price forecasts.
    \48\ U.S. Energy Information Administration. Annual Energy 
Outlook 2010. Washington, DC. April 2010.
---------------------------------------------------------------------------

6. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing components 
that have failed in the appliance, whereas maintenance costs are 
associated with maintaining the operation of the equipment. In its 
preliminary analysis, DOE did not have information suggesting that 
these costs would change with higher efficiency levels.

[[Page 22514]]

    Commenting on DOE's approach, AHAM stated that repair costs are 
typically estimated using a 1:1 ratio with part costs, so if component 
costs increase by 10 percent, repair costs are expected to also 
increase by 10 percent. AHAM stated that DOE should incorporate these 
higher repair costs into its analysis of clothes dryers and room air 
conditioners to provide a more representative evaluation of total 
consumer cost for higher efficiency products. (AHAM, No. 25 at p. 12)
    For clothes dryers, Whirlpool stated that the repair and 
maintenance costs generally do not vary by efficiency, but for heat 
pump dryers, this assumption is not valid. Whirlpool stated that new 
technologies such as these would cost two to three times more to repair 
than conventional dryers due to their complex nature and the cost of 
disconnecting and reconnecting water sources. (Whirlpool, No. 22 at p. 
4) AHAM stated that maintenance costs generally will not vary by 
efficiency level, but a heat pump clothes dryer is expected to have 
higher maintenance costs because of the heat pump and the addition of 
refrigerant. AHAM stated that maintenance for these units would be 
similar to that for standard air conditioning equipment or heat pump 
water heaters. (AHAM, No. 25 at p. 11)
    For the final rule analysis, DOE modified the maintenance and 
repair costs for both clothes dryers and room air conditioners. For 
clothes dryers, DOE derived annualized maintenance and repair 
frequencies based on Consumer Reports data on repair and maintenance 
issues for clothes dryers during the first 4 years of ownership. DOE 
estimated that on average 1.5 percent of electric and 1.75 percent of 
gas clothes dryers are maintained or repaired each year. Based on RS 
Means Facilities Maintenance & Repair 2010 Cost Data,\49\ DOE also 
estimated that an average service call and any necessary repair or 
maintenance takes about 2.5 hours. DOE further estimated that the 
average material cost is equal to one-half of the equipment cost. The 
values for cost per service call were then annualized by multiplying by 
the frequencies and dividing by the average equipment lifetime of 16 
years.
---------------------------------------------------------------------------

    \49\ Available at: http://rsmeans.reedconstructiondata.com/60300.aspx.
---------------------------------------------------------------------------

    For room air conditioners, based on data on repair frequencies for 
central air conditioners, DOE assumed that repair frequencies are low 
and increase for the higher-capacity units due to their more expensive 
equipment cost. DOE assumed that 1 percent of small sized units (below 
6,000 Btu/hr), 2.5 percent of medium sized units (8,000 to 14,000 Btu/
hr), and 5 percent of large sized units (above 20,000 Btu/hr) are 
maintained or repaired each year. Based on the above-cited RS Means 
data, DOE also estimated that an average service call and any necessary 
repair or maintenance takes about 1 hour for small and medium-sized 
units and 2 hours for large units. DOE further estimated that the 
average material cost is equal to one-half of the incremental equipment 
cost. The values for cost per service call were then annualized by 
multiplying by the frequencies and dividing by the average equipment 
lifetime of 10.5 years.
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 samples. In the 
preliminary analysis, DOE conducted an analysis of actual lifetime in 
the field using a combination of shipments data, the stock of the 
considered appliances, and responses in RECS on the age of the 
appliances in the homes. The data allowed DOE to estimate a survival 
function, which provides a distribution of lifetimes. This analysis 
yielded an average lifetime of approximately 16 years for clothes 
dryers and approximately 10.5 years for room air conditioners.
    For clothes dryers, the ECOS report (prepared for NRDC) stated that 
the typical lifetime of a clothes dryer is about 12 years. (NRDC, No. 
30 at p. 8) AHAM stated that DOE should modify average clothes dryer 
lifetime to 13 years because both Appliance Magazine and confidential 
industry data support that value. (AHAM, No. 25 at p. 11) Whirlpool 
stated that Appliance Magazine shows 12 years as the expected lifetime 
for clothes dryers, which is largely consistent with their internal 
estimates. (Whirlpool, No. 22 at p. 5)
    For the final rule analysis, DOE retained the approach used to 
estimate clothes dryer lifetime in the preliminary analysis because it 
relies on field data, and because the sources used by Appliance 
Magazine and the confidential industry data were unavailable for 
analysis by DOE.
    For room air conditioners, AHAM stated that the average lifetime of 
10.5 years from the preliminary analysis appears reasonable, and is 
consistent with the value of 10 years reported by Appliance Magazine. 
(AHAM, No. 25 at p. 11) AHAM stated, however, that there could be a 
very large difference in room air conditioner lifetime between product 
classes. (AHAM, Public Meeting Transcript, No. 21.4 at p. 126) While 
DOE acknowledges that there may be differences in room air conditioner 
lifetime among the product classes, DOE continued to use the same 
lifetime distribution for all room air conditioner product classes 
because it is not aware of any data that would provide a basis for 
using different lifetimes.
    See chapter 8 of the direct final rule 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 to estimate 
the present value of future operating costs. DOE estimated a 
distribution of residential discount rates for clothes dryers and room 
air conditioners, and also estimated a distribution of commercial 
discount rates for commercial users of room air conditioners. See 
chapter 8 in the direct final rule TSD for further details on the 
development of consumer discount rates.
a. Residential Discount Rates
    In its preliminary analysis, to establish residential discount 
rates for the LCC analysis, DOE identified all debt or asset classes 
that might be used to purchase refrigeration products, including 
household assets that might be affected indirectly. It estimated the 
average percentage shares of the various debt or asset classes for the 
average U.S. household using data from the Federal Reserve Board's 
``Survey of Consumer Finances'' (SCF) for 1989, 1992, 1995, 1998, 2001, 
2004, and 2007. Using the SCF and other sources, DOE then developed a 
distribution of rates for each type of debt and asset 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, weighted by the shares of each class, is 
5.1 percent. DOE used the same approach for today's final rule.
b. Commercial Discount Rates
    In its preliminary analysis, DOE derived discount rates for 
commercial-sector customers from the cost of capital of publicly-traded 
firms in the sectors that purchase room air conditioners. The firms 
typically finance equipment purchases through debt, equity capital, or 
both. DOE estimated the cost of the firms' capital as the weighted 
average of

[[Page 22515]]

the cost of equity financing and the cost of debt financing for recent 
years for which data were available (2001 through 2008). The estimated 
average discount rate for companies that purchase room air conditioners 
is 5.7 percent. DOE used the same approach for today's final rule.
9. Compliance Date of Amended Standards
    DOE is required by consent decree to publish a final rule 
establishing any amended energy conservation standards by June 30, 
2011. In the absence of any adverse comment on today's direct final 
rule that may provide a reasonable basis for withdrawing the rule, 
compliance with amended standards for clothes dryers and room air 
conditioners will be required on April 21, 2014. DOE calculated the LCC 
and PBP for clothes dryers and room air conditioners as if consumers 
would purchase new products in the year compliance with the standard is 
required. If adverse comment that may provide a reasonable basis for 
withdrawing the rule is received, DOE will proceed with the NOPR 
published elsewhere in today's Federal Register, and compliance with 
any amended standards would be required 3 years after the date of 
publication of any final standards. As noted above, DOE is required by 
consent decree to publish a final rule establishing any amended 
standards by June 30, 2011.
10. 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 (that is, the case without 
new energy efficiency standards). DOE refers to this distribution of 
product of efficiencies as a base-case efficiency distribution.
    In the preliminary analysis, DOE primarily relied on data submitted 
by AHAM to estimate the efficiency distributions in recent years for 
each of the product classes that were analyzed in the LCC and PBP 
analysis. DOE assumed that these market shares would remain constant 
through 2014. Whirlpool supported DOE's approach to forecast base-case 
market shares. (Whirlpool, No. 22 at p. 5)
    For the final rule analysis, DOE retained the approach used in the 
preliminary analysis for clothes dryers. For room air conditioners, 
however, DOE modified its approach for estimating base-case efficiency 
distributions for the final rule analysis based on historical trends of 
penetration of ENERGY STAR models. DOE believes that this data support 
a constant growth rate of energy efficiency of 0.25 percent per year. 
For further information on DOE's estimate of base-case efficiency 
distributions, see chapter 8 of the direct final rule TSD.
11. 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. The simple 
payback period does not account for changes in operating expense over 
time or the time value of money. 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 are the total installed cost of 
the equipment to the customer for each efficiency level and the average 
annual operating expenditures for each efficiency level. The PBP 
calculation uses the same inputs as the LCC analysis, except that 
discount rates are not used.
12. 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 savings by 
calculating the quantity of those savings in accordance with the 
applicable DOE test procedure, and multiplying that amount by the 
average energy 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 
notice.

G. National Impact Analysis--National Energy Savings and Net Present 
Value Analysis

    The NIA assesses the national energy savings (NES) and the 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. For the final rule 
analysis, DOE forecasted the energy savings, operating cost savings, 
product costs, and NPV of consumer benefits for products sold from 2014 
through 2043.
    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 (that is, 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 an MS Excel spreadsheet model to calculate the energy 
savings and the national consumer costs and savings from each TSL. The 
direct final rule TSD and other documentation 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 inputs (as opposed to probability distributions).
    For the current analysis, the NIA used projections of energy prices 
and housing starts from the AEO2010 Reference case. In addition, DOE 
analyzed scenarios that used inputs from the AEO2010 Low Economic 
Growth and High Economic Growth cases. These 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-A of the direct final rule TSD.
    Table IV-32 summarizes the inputs and key assumptions DOE used for 
the NIA analysis for the preliminary analysis and the changes to the 
analyses for the direct final rule. Discussion of these inputs and 
changes follows the

[[Page 22516]]

table. See chapter 10 of the direct final rule TSD for further details.

   Table IV.32--Summary of Inputs and Key Assumptions for the National
                             Impact Analysis
------------------------------------------------------------------------
                                                       Changes for the
           Inputs                Preliminary TSD        proposed rule
------------------------------------------------------------------------
Shipments...................  Annual shipments      No change in
                               from shipments        approach.
                               model.
Compliance Date of Standard.  2014................  No change.
Base-Case Forecasted          For clothes dryers    For clothes dryers,
 Efficiencies.                 and room air          no change in basic
                               conditioners,         approach; modified
                               efficiency            efficiency
                               distributions are     distributions based
                               maintained            on new information.
                               unchanged during      For room air
                               the forecast period.  conditioners, used
                                                     an efficiency trend
                                                     based on historical
                                                     market data.
Standards-Case Forecasted     For clothes dryers    For clothes dryers,
 Efficiencies.                 and air               no change in basic
                               conditioners, used    approach; modified
                               a ``roll-up''         efficiency
                               scenario.             distributions based
                                                     on new information.
                                                     For room air
                                                     conditioners, used
                                                     a ``roll-up +
                                                     shift'' scenario to
                                                     establish the
                                                     distribution of
                                                     efficiencies.
Annual Energy Consumption     Annual weighted-      No change.
 per Unit.                     average values as a
                               function of CEF *
                               (clothes dryers)
                               and SWCEER * *
                               (room air
                               conditioners).
Total Installed Cost per      Annual weighted-      No change.
 Unit.                         average values as a
                               function of CEF *
                               (clothes dryers)
                               and SWCEER * *
                               (room air
                               conditioners).
Annual Energy Cost per Unit.  Annual weighted-      No change.
                               average values as a
                               function of the
                               annual energy
                               consumption per
                               unit and energy
                               prices.
Repair and Maintenance Cost   Annual values as a    No change.
 per Unit.                     function of
                               efficiency level.
Energy Prices...............  AEO2009 forecasts     Updated using
                               (to 2035) and         AEO2010 forecasts.
                               extrapolation
                               through 2043.
Energy Site-to-Source         Varies yearly and is  No change.
 Conversion Factor.            generated by NEMS-
                               BT.
Discount Rate...............  Three and seven       No change.
                               percent real.
Present Year................  Future expenses       No change.
                               discounted to 2011,
                               when the final rule
                               is published.
------------------------------------------------------------------------
* Combined Energy Factor
* * Shipments-Weighted (stand by) Combined Energy Efficiency Ratio.

1. Shipments
    Forecasts of product shipments are needed to calculate the national 
impacts of standards on energy use, NPV, and future manufacturer cash 
flows. DOE develops shipment forecasts based on an analysis of key 
market drivers for each considered product. In DOE's shipments model, 
shipments of products are driven by new construction, stock 
replacements, and other types of purchases. The shipments models take 
an accounting approach, tracking market shares of each product class 
and the vintage of units in the existing stock. Stock accounting uses 
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.
    Commenting on the preliminary analysis, Whirlpool stated that 
clothes dryer base case shipments will not grow linearly as DOE 
assumes. Clothes dryers are a highly saturated product today, and homes 
without dryers are generally multi-family units that lack sufficient 
space for these products. Whirlpool stated that saturation of clothes 
dryers will not change. Hence, growth in this product category cannot 
exceed the growth of the housing stock. (Whirlpool, No. 22 at p. 7)
    For the final rule analysis, DOE reviewed its approach for 
forecasting dryer purchases for first-time owners, which include 
consumers that currently do not have a dryer and consumers in new homes 
who purchase a dryer. To better account for constraints on purchase, 
such as those mentioned by Whirlpool, DOE reduced its estimate of the 
number of purchases by first-time owners. As a result, its forecast for 
the final rule analysis shows shipments growing more slowly over the 
forecast period (an average of 0.8 percent per year) than in the 
forecast in the preliminary analysis. The average growth rate of 0.8 
percent is slightly less than the average annual growth rate in the 
number of households projected in AEO2010 (1.0 percent in 2008-2035).
    To estimate the effects on product shipments from increases in 
product price projected to accompany amended standards at higher 
efficiency levels, DOE applied a price elasticity parameter. It 
estimated this parameter with a regression analysis that used purchase 
price and efficiency data specific to residential refrigerators, 
clothes washers, and dishwashers over the period 1980-2002. The 
estimated ``relative price elasticity'' incorporates the impacts from 
purchase price, operating cost, and household income, and it also 
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 direct 
final rule TSD.
2. 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.10 described how DOE 
developed a base-case energy efficiency distribution (which yields a 
shipment-weighted average efficiency)

[[Page 22517]]

for each of the considered product classes for the first year of the 
forecast period. To project the trend in efficiency over the entire 
forecast period, DOE considered recent trends and programs such as 
ENERGY STAR. For clothes dryers, DOE assumed no improvement of energy 
efficiency in the base case and held the base-case energy efficiency 
distribution constant throughout the forecast period. For room air 
conditioners, DOE applied a constant growth rate of energy efficiency 
of 0.25 percent per year, based on historical trends of penetration of 
ENERGY STAR products.
    To estimate efficiency trends in the standards cases, DOE has used 
``roll-up'' and/or ``shift'' scenarios in its standards rulemakings. 
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. Under the shift scenario, DOE re-orients the distribution 
above the new minimum energy conservation standard.
    In the preliminary analysis, DOE used a roll-up scenario in 
developing its forecasts of efficiency trends in the standards cases. 
The California Utilities stated that DOE should consider a ``roll-up 
and market shift'' scenario for room air conditioners in standards 
cases because, if the ENERGY STAR level is revised above the new 
standard, it may create a market incentive that increases the share of 
higher efficiency products. (California Utilities, No. 31 at p. 19)
    DOE agrees that amended standards for room air conditioners would 
likely result in changes to ENERGY STAR levels that would increase the 
share of products with energy efficiency above the standard based on 
the historical data reviewed for room air conditioners. Therefore, for 
the final rule analysis, DOE applied a ``roll-up and shift'' scenario 
that accounts for such increase in share. For clothes dryers, DOE 
retained the approach used in the preliminary analysis for the final 
rule. For further details about the forecasted efficiency 
distributions, see chapter 10 of the direct final rule TSD.

3. National Energy Savings

    For each year in the forecast period, DOE calculates the NES for 
each standard level by multiplying the stock of equipment affected by 
the energy conservation standards by the per-unit annual energy 
savings. As discussed in section IV.E, DOE incorporated the rebound 
effect utilized in the energy use analysis into its calculation of 
national energy savings for room air conditioners.
    To estimate the national energy savings expected from appliance 
standards, DOE uses a multiplicative factor to convert site energy 
consumption (at the home or commercial building) into primary or source 
energy consumption (the energy required to convert and deliver the site 
energy). These conversion factors account for the energy used at power 
plants to generate electricity and losses in transmission and 
distribution, as well as for natural gas losses from pipeline leakage 
and energy used for pumping. For electricity, the conversion factors 
vary over time due to projected changes in generation sources (that is, 
the power plant types projected to provide electricity to the country). 
The factors that DOE developed are marginal values, which represent the 
response of the system to an incremental decrease in consumption 
associated with appliance standards.
    In the preliminary analysis, DOE used annual site-to-source 
conversion factors based on the version of NEMS that corresponds to 
AEO2009. For today's rule, DOE updated its conversion factors based on 
the NEMS that corresponds to AEO2010, which provides energy forecasts 
through 2035. For 2036-2043, DOE used conversion factors that remain 
constant at the 2035 values.
    Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed 
DOE to contract a study with the National Academy of Science (NAS) to 
examine whether the goals of energy efficiency standards are best 
served by measurement of energy consumed, and efficiency improvements, 
at the actual point-of-use or through the use of the full-fuel-cycle, 
beginning at the source of energy production. (Pub. L. 109-58 (August 
8, 2005)). NAS appointed a committee on ``Point-of-Use and Full-Fuel-
Cycle Measurement Approaches to Energy Efficiency Standards'' to 
conduct the study, which was completed in May 2009. The NAS committee 
defined full-fuel-cycle energy consumption as including, in addition to 
site energy use, the following: energy consumed in the extraction, 
processing, and transport of primary fuels such as coal, oil, and 
natural gas; energy losses in thermal combustion in power generation 
plants; and energy losses in transmission and distribution to homes and 
commercial buildings.\50\
---------------------------------------------------------------------------

    \50\ The National Academies, Board on Energy and Environmental 
Systems, Letter to Dr. John Mizroch, Acting Assistant Secretary, 
U.S. DOE, Office of EERE from James W. Dally, Chair, Committee on 
Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards, May 15, 2009.
---------------------------------------------------------------------------

    In evaluating the merits of using point-of-use and full-fuel-cycle 
measures, the NAS committee noted that DOE uses what the committee 
referred to as ``extended site'' energy consumption to assess the 
impact of energy use on the economy, energy security, and environmental 
quality. The extended site measure of energy consumption includes the 
energy consumed during the generation, transmission, and distribution 
of electricity but, unlike the full-fuel-cycle measure, does not 
include the energy consumed in extracting, processing, and transporting 
primary fuels. A majority of the NAS committee concluded that extended 
site energy consumption understates the total energy consumed to make 
an appliance operational at the site. As a result, the NAS committee 
recommended that DOE consider shifting its analytical approach over 
time to use a full-fuel-cycle measure of energy consumption when 
assessing national and environmental impacts, especially with respect 
to the calculation of greenhouse gas emissions. The NAS committee also 
recommended that DOE provide more comprehensive information to the 
public through labels and other means, such as an enhanced Web site. 
For those appliances that use multiple fuels (such as water heaters), 
the NAS committee indicated that measuring full-fuel-cycle energy 
consumption would provide a more complete picture of energy consumed 
and permit comparisons across many different appliances, as well as an 
improved assessment of impacts.
    In response to the NAS committee recommendations, DOE issued, on 
August 20, 2010 a Notice of Proposed Policy proposing to incorporate a 
full-fuel cycle analysis into the methods it uses to estimate the 
likely impacts of energy conservation standards on energy use and 
emissions. FR 75 51423. Specifically, DOE proposed to use full-fuel-
cycle (FFC) measures of energy and greenhouse gas (GHG) emissions, 
rather than the primary (extended site) energy measures it currently 
uses. Additionally, DOE proposed to work collaboratively with the 
Federal Trade Commission (FTC) to make FFC energy and GHG emissions 
data available to the public to enable consumers to make cross-class 
comparisons. On October 7th, DOE held an informal public meeting to 
discuss and receive comments on its planned approach. The Notice, a 
transcript of the public meeting and all public comments received by 
DOE are available at:

[[Page 22518]]

http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EERE-2010-BT-NOA-0028. DOE intends to develop a final policy statement on 
these subjects and then take steps to begin implementing that policy in 
future rulemakings and other activities.
4. Net Present Value of Consumer Benefit
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers of the 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 
in the forecast period.
    DOE multiplies the net savings in future years by a discount factor 
to determine their present value. For the preliminary analysis and 
today's final rule, DOE estimated the NPV of appliance 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.\51\ 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 ``societal 
rate of time preference,'' which is the rate at which society discounts 
future consumption flows to their present value.
---------------------------------------------------------------------------

    \51\ OMB Circular A-4 (Sept. 17, 2003), section E, ``Identifying 
and Measuring Benefits and Costs. Available at: http://www.whitehouse.gov/omb/memoranda/m03-21.html.
---------------------------------------------------------------------------

    As noted above, DOE is accounting for the rebound effect associated 
with more efficient room air conditioners in its determination of 
national energy savings. The take-back in energy consumption associated 
with the rebound effect provides consumers with increased value (that 
is, a cooler or warmer indoor environment). The net impact on consumers 
is thus the sum of the change in the cost of owning the room air 
conditioner (that is, life-cycle cost) and the increased value for the 
more comfortable indoor environment. The consumer effectively pays for 
the increased value of a more comfortable environment in his or her 
utility bill. Because the monetary cost of this added value is 
equivalent to the value of the foregone energy savings, the economic 
impacts on consumers, as measured in the NPV are the same regardless of 
the rebound effect.
5. Benefits From Effects of Standards on Energy Prices
    Reduction in electricity consumption associated with amended 
standards for clothes dryers and room air conditioners could reduce the 
electricity prices charged to consumers in all sectors of the economy 
and thereby reduce their electricity expenditures. In chapter 2 of the 
preliminary TSD, DOE explained that, because the power industry is a 
complex mix of fuel and equipment suppliers, electricity producers and 
distributors, it did not plan to estimate the value of potentially 
reduced electricity costs for all consumers associated with amended 
standards for refrigeration products. In response, NEEP urged DOE to 
quantify electricity demand reductions achieved by these updated 
standards in financial terms. (NEEP, No. 27 at p. 1)
    For this rule, DOE used NEMS-BT to assess the impacts of the 
reduced need for new electric power plants and infrastructure projected 
to result from standards. In NEMS-BT, changes in power generation 
infrastructure affect utility revenue requirements, which in turn 
affect electricity prices. DOE estimated the impact on electricity 
prices associated with each considered TSL. Although the aggregate 
benefits for electricity users are potentially large, there may be 
negative effects on some of the actors involved in electricity supply, 
particularly power plant providers and fuel suppliers. Because there is 
uncertainty about the extent to which the benefits for electricity 
users from reduced electricity prices would be a transfer from actors 
involved in electricity supply to electricity consumers, DOE has 
concluded that, at present, it should not give a heavy weight to this 
factor in its consideration of the economic justification of new or 
amended standards. DOE is continuing to investigate the extent to which 
electricity price changes projected to result from standards represent 
a net gain to society.

H. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended standards on 
consumers, DOE evaluates the impact on identifiable subgroups of 
consumers (such as low-income households) that may be 
disproportionately affected by a national standard. DOE evaluates 
impacts on particular subgroups of consumers primarily by analyzing the 
LCC impacts and PBP for those particular consumers from alternative 
standard levels. For this rule, DOE analyzed the impacts of the 
considered standard levels on low-income consumers and senior citizens. 
Section V.B.1.b summarizes the results of the consumer subgroup 
analysis, and chapter 11 in the direct final rule TSD describes the 
analysis method.

I. Manufacturer Impact Analysis

    The following sections address the various steps taken to analyze 
the impacts of the amended standards on manufacturers. These steps 
include conducting a series of analyses, interviewing manufacturers, 
and evaluating the comments received from interested parties during 
this rulemaking.
1. Overview
    In determining whether an amended energy conservation standard for 
residential clothes dryers and room air conditioners subject to this 
rulemaking 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 as determined by the Attorney 
General that is likely to result from the adoption of a standard. (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 of clothes dryers and room air conditioners, and to 
assess the impacts of such standards on employment and manufacturing 
capacity.
    The MIA is both a quantitative and qualitative analysis. The 
quantitative part of the MIA relies on the Government Regulatory Impact 
Model (GRIM), an industry cash-flow model customized for the clothes 
dryer and room air conditioners covered in this rulemaking. See section 
IV.I.2 below, for details on the GRIM analysis. The qualitative part of 
the MIA addresses factors such as product characteristics, 
characteristics of particular firms, and market trends. The qualitative 
discussion also includes an assessment of the impacts of standards on 
manufacturer subgroups. The complete MIA is discussed in chapter 12 of 
the direct final rule 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 clothes dryers 
and room air conditioner industries based on the

[[Page 22519]]

market and technology assessment prepared for this rulemaking. Before 
initiating the detailed impact studies, DOE collected information on 
the present and past structure and market characteristics of each 
industry. This information included market share data, product 
shipments, manufacturer markups, and the cost structure for various 
manufacturers. The industry profile includes: (1) Further detail on the 
overall market and product characteristics; (2) estimated manufacturer 
market shares; (3) financial parameters such as net plant, property, 
and equipment; selling, general and administrative (SG&A) expenses; 
cost of goods sold, and other similar information; and (4) trends in 
the number of firms, market, and product characteristics. The industry 
profile included a top-down cost analysis of manufacturers in each 
industry that DOE used to derive preliminary financial inputs for the 
GRIM (such as revenues, depreciation, SG&A, and research and 
development (R&D) expenses). DOE also used public sources of 
information to further calibrate its initial characterization of each 
industry, including Security and Exchange Commission 10-K filings,\52\ 
Standard & Poor's stock reports,\53\ and corporate annual reports. DOE 
supplemented this public information with data released by privately 
held companies.
---------------------------------------------------------------------------

    \52\ Available online at http://www.sec.gov.
    \53\ Available online at http://www2.standardandpoors.com.
---------------------------------------------------------------------------

b. Phase 2, Industry Cash Flow Analysis
    Phase 2 focused on the financial impacts of potential amended 
energy conservation standards on each 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 GRIMs to perform two cash-flow analyses: One for the 
clothes dryers industry and one for room air conditioners. In 
performing these analyses, DOE used the financial values derived during 
Phase 1 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 manufacturers, niche players, or manufacturers 
exhibiting a cost structure that differs significantly from the 
industry average could be more negatively affected. To address this 
possible impact, DOE used the results of the industry characterization 
analysis in Phase 1 to group manufacturers that exhibit similar 
production and cost structure characteristics. During the manufacturer 
interviews, DOE discussed financial topics specific to each 
manufacturer and obtained each manufacturer's view of the industry as a 
whole.
    DOE reports the MIA impacts of amended energy conservation 
standards by grouping together the impacts on manufacturers of certain 
product classes. While DOE did not identify any other subgroup of 
manufacturers of clothes dryers or room air conditioners that would 
warrant a separate analysis, DOE specifically investigated impacts on 
small business manufacturers. See section VI.B for more information.
2. GRIM Analysis
    DOE uses the GRIM to quantify the changes in cash flow that result 
in a higher or lower industry value. The GRIM analysis is a standard, 
annual cash-flow analysis that incorporates manufacturer costs, 
manufacturer selling prices, shipments, and industry financial 
information as inputs, and models changes in costs, distribution of 
shipments, investments, and manufacturer margins that would result from 
amended energy conservation standards. The GRIM spreadsheet uses the 
inputs to arrive at a series of annual cash flows, beginning with the 
base year of the analysis, 2011 (which accounts for the investments 
needed to bring products into compliance by 2014), and continuing to 
2043. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during this period. For clothes dryers and room air 
conditioners, DOE uses a real discount rate of 7.2 percent for all 
products.
    DOE used the GRIM to calculate cash flows using standard accounting 
principles and to compare changes in INPV between a base case and 
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. DOE collected this information from a number 
of sources, including publicly available data and interviews with a 
number of manufacturers (described in the next section). Additional 
details about the GRIM can be found in chapter 12 of the direct final 
rule TSD.
a. GRIM Key Inputs
Manufacturer Production Costs
    DOE used the manufacturer production costs (MPCs) calculated in the 
engineering analysis for each efficiency level for the year 2009, as 
described in section IV.C above, and further detailed in chapter 5 of 
the direct final rule TSD. For both clothes dryers and room air 
conditioners, DOE calculated the 2009 MPCs using cost models based on 
product tear downs. The cost models also provide a breakdown of MPCs 
into material, labor, overhead, and depreciation. Manufacturing a 
higher-efficiency product is typically more expensive than 
manufacturing a baseline product due to the use of more complex 
components and higher-cost raw materials. The changes in the MPCs of 
the analyzed products can affect revenues, gross margins, and cash flow 
of the industry, making these product cost data key GRIM inputs for 
DOE's analysis.
Base-Case Shipments Forecast
    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of these values by efficiency 
level. Changes in the efficiency mix at each standard level affect 
manufacturer finances. For this analysis, the GRIM uses the NIA 
shipments forecasts from 2011 to 2043, the end of the analysis period.
    In the shipments analysis, DOE also estimated the distribution of 
efficiencies in the base case for all product classes. For clothes 
dryers, DOE held the base-case energy efficiency distribution constant 
throughout the forecast period. For the room air conditioner industry, 
DOE assumed a migration of the market toward higher efficiency over 
time. See section IV.G.1, above, for additional details.
Product and Capital Conversion Costs
    Amended energy conservation standards will 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 to adapt or change existing production

[[Page 22520]]

facilities so that new product designs can be fabricated and assembled.
    For both clothes dryers and room air conditioners, DOE based its 
conversion cost estimates that would be required to meet each TSL on 
information obtained from manufacturer interviews, the design pathways 
analyzed in the engineering analysis, and market information about the 
number of products that would require modification at each efficiency 
level. Because no energy label is currently prescribed for clothes 
dryers, and because clothes dryers are not part of the ENERGY STAR 
program, the best source of clothes dryer efficiency information is the 
CEC product database. DOE segmented each product on the CEC Web site 
into its appropriate product class using energy source, drum capacity, 
voltage, and combination unit information. DOE then searched 
manufacturer Web sites and numerous retail Web sites to determine which 
clothes dryers were current products. DOE assigned each product 
currently produced into efficiency levels using the reported energy 
factor. Finally, DOE assigned each of these products into product 
lines, classifying each group of products made by same manufacturer 
with identical drum capacities and energy factors into the same product 
line.
    DOE calculated the product and capital conversion costs at each 
efficiency level for every product class by multiplying the total 
number of product lines that fell below the required efficiency by an 
estimate of the conversion costs to reach that efficiency level. DOE 
calculated the total product development required at each efficiency 
level by estimating the necessary engineering resources required to 
implement the design options in the engineering analysis at the 
efficiency level across a product line. DOE calculated the total 
capital conversion costs required at each efficiency level by 
estimating the additional equipment and changes to existing equipment 
that would be required to implement the design option in the 
engineering analysis at that efficiency level across a product line.
    While DOE's calculation of conversion costs for room air 
conditioners was similar to the calculation of conversion costs for 
clothes dryers, DOE used a slightly different approach to determine the 
number of product lines at each efficiency level. DOE used the CEC 
appliance database to determine what models currently exist on the 
market for room air conditioners and verified these current products 
through manufacturer and retail Web sites. DOE eliminated products in 
the database that were discontinued due to the recent refrigerant 
switch to R-410A. DOE segmented each product from the CEC database into 
its appropriate product class using cooling capacity, the existence of 
louvers, and type of room air conditioner. DOE assigned each product 
currently produced into efficiency levels using the reported EER. 
Finally, DOE determined a representative distribution of the industry 
by extrapolating the information for manufacturers for which it had 
complete efficiency information to account for the product lines of all 
manufacturers.
    Like its method for clothes dryers, DOE calculated the industry 
wide conversion costs by multiplying the number of product lines in 
each product class that fell below the required efficiency by its 
estimate of the product and capital conversion costs. DOE's estimate 
was based on the design options at each efficiency level in the 
engineering analysis. DOE's per line product conversion costs were 
calculated by estimating the product development time required to make 
the design change across a product family. For component switch outs, 
DOE assumed that design changes for components that interacted with 
other parts of the room air conditioner would be more costly than one-
for-one switch outs because these components would require greater 
engineering effort to be adapted into new product designs. For capital 
conversion costs, DOE assumed based on manufacturer feedback that the 
only design changes that would require changes to existing equipment 
were larger chassis volumes, evaporator changes, and condenser changes.
    DOE's estimates of the total capital conversion and production 
conversion costs for clothes dryer and room air conditioners by TSL can 
be found in section V.B.2 of today's direct final rule. The estimates 
of the total capital conversion and product conversion costs by product 
class and efficiency level can be found in chapter 12 of the direct 
final rule TSD.
b. GRIM Scenarios
Clothes Dryer Standards-Case Shipment Forecasts
    The GRIM used the shipments developed in the NIA for clothes 
dryers. To determine efficiency distributions for the standards case, 
DOE used a roll-up scenario. In this scenario, products that fall below 
the amended energy conservation standard are assumed to ``roll-up'' to 
the new standard in 2014. DOE also assumed there was a relative price 
elasticity in the clothes dryers market, meaning amended energy 
conservation standards that increase the first cost of clothes dryers 
would result in lower total shipments. See section IV.G.1 of this 
direct final rule, and chapter 10 of the direct final rule TSD for more 
information on the clothes dryer standards-case shipment scenarios.
Room Air Conditioner Standards-Case Shipment Forecasts
    The GRIM used the shipments developed in the NIA for room air 
conditioners. As stated in IV.I.2.a, the base case shipments assume 
that there is a migration over time to more efficient products based on 
historical trends of penetration of ENERGY STAR products. In the 
standards case, DOE used a ``roll-up + shift'' scenario. In this 
scenario, DOE assumed that amended standards for room air conditioners 
would likely result in changes to ENERGY STAR levels that would 
increase the share of products with energy efficiency above the 
standard. DOE also assumed there was a relative price elasticity in the 
room air conditioner market, meaning that amended energy conservation 
standards that increase the first cost of room air conditioners would 
result in lower total shipments. See section IV.G.1 of this direct 
final rule and chapter 10 of the direct final rule TSD for more 
information on the room air conditioner standards-case shipment 
scenarios.
Markup Scenarios
    In the GRIM, DOE used the MSPs calculated in the engineering 
analysis for each product class and efficiency level. MSPs include 
direct manufacturing production costs (that is, labor, material, and 
overhead estimated in DOE's MPCs) and all non-production costs (that 
is, SG&A, R&D, and interest), along with profit. For clothes dryers, 
DOE did not separate shipping costs from the manufacturer markup 
because shipping costs are not a function of the design options 
analyzed. The MSP for clothes dryers is equal to the MPC times the 
manufacturer markup. For room air conditioners, DOE separated the 
shipping costs from the markup multiplier for the analysis to 
explicitly account for the design options that would result in higher 
shipping costs due to weight increases. DOE calculated the MSP for room 
air conditioners by multiplying the MPC by the manufacturer markup and 
adding shipping costs.
    For the MIA, DOE modeled two standards-case markup scenarios to

[[Page 22521]]

represent the uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of amended 
energy conservation standards: (1) A flat markup scenario, and (2) a 
preservation of operation profit scenario. Modifying these markups from 
the base case to the standards cases yields different sets of impacts 
on manufacturers' changing industry revenue and cash flow.
    The flat markup scenario assumes that the cost of goods sold for 
each product is marked up by a flat percentage to cover standard SG&A 
expenses, R&D expenses, and profit. The flat markup scenario uses the 
baseline manufacturer markup (discussed in chapter 6 of the direct 
final rule TSD) for all products in both the base case and the 
standards case. To derive this percentage, DOE evaluated publicly 
available financial information for manufacturers of major household 
appliances whose product offerings include clothes dryers and room air 
conditioners. DOE also requested feedback on this value during 
manufacturer interviews. This scenario represents the upper bound of 
industry profitability in the standards case because under this 
scenario, manufacturers are able to fully pass through additional costs 
due to standards to their customers.
    DOE also modeled a lower bound profitability scenario. In this 
scenario, the manufacturer markups are lowered such that, in the 
standards case, manufacturers are able to maintain only the base-case 
total operating profit in absolute dollars, despite higher product 
costs and investment. DOE implemented this scenario in GRIM by lowering 
the manufacturer markups at each TSL to yield approximately the same 
earnings before interest and taxes in the standards case in the year 
after the compliance date of the amended standards as in the base case. 
For clothes dryers in the preservation of operating profit scenario, 
DOE assumed that the industry wide impacts would occur under the new 
minimum efficiency levels. DOE altered the markups only for the 
minimally compliant products in this scenario, with margin impacts not 
occurring for products that already exceed the amended energy 
conservation standard. For room air conditioners, DOE assumed that the 
margin impacts would affect the minimally compliant products at the 
amended energy conservation standards and the next highest efficiency 
level. The NIA analyzed an efficiency migration in both the base case 
and the standards case due to the assumption that manufacturers will 
produce increasingly more efficient room air conditioners as ENERGY 
STAR levels for these products change over time. Therefore, under 
amended energy conservation standards the shipment weighted average 
efficiency increases from the new minimum standard to higher efficiency 
levels. DOE assumed this market shift caused by standards would impact 
margins on products that also become the de facto minimally efficient 
product over time. For both clothes dryers and room air conditioners, 
the preservation of operating profit represents the lower bound of 
industry profitability following amended energy conservation standards 
because under this scenario, higher production costs and the 
investments required to comply with the amended energy conservation 
standard do not yield additional operating profit.
    While DOE used the same markup scenarios for clothes dryers and 
room air conditioners, DOE captured different concerns for each 
industry by modeling the preservation of operating profit scenario. For 
clothes dryers, manufacturers were particularly concerned about the 
inability to markup the full cost of production. Because there is 
currently no energy label requirement or ENERGY STAR program for 
clothes dryers, the lack of consumer information makes it more 
difficult for customers to calculate individual payback and energy 
savings. Consequently, the manufacturing cost for more efficient 
clothes dryers could not be fully marked up because energy efficiency, 
unlike price and other features, is not a factor in the purchasing 
decision of most consumers. Manufacturers also cited the highly 
competitive market, the concentrated retail market that represents the 
majority of sales, and price points that are fixed partly by paired 
washing machines as other reasons that additional production costs 
would not yield higher profits in the standards case. For room air 
conditioners, manufacturers stated that higher production costs could 
severely harm profitability. Manufacturers already earn very little 
profit on the small, high-volume window units due to the enormous price 
pressure retailers exert because of their purchasing power, and due to 
fierce competition within the room air conditioner industry. 
Manufacturers accept lower absolute profit on these units with the 
expectation of making a larger per unit profit on other more costly 
products. They also do so because maintaining high production volumes 
of these units allows manufacturers to keep factories utilized and to 
achieve purchasing economies. In addition, because many purchases are 
impulse buys during periods of atypically warm weather for products 
that are used sparingly, any increase in first cost could impact these 
types of sales. Therefore, manufacturers were skeptical that customers 
would accept the full additional cost of production.
3. Discussion of Comments
    During the March 2010 public meeting, interested parties commented 
on the assumptions and results of the manufacturer impacts presented in 
the preliminary analysis. Oral and written comments discussed several 
topics, including the classification of small business manufacturers, 
the cumulative regulatory burden on manufacturers, the impact of R-410A 
conversion, and direct employment impacts. DOE addresses these comments 
below.
a. Small Businesses
    In the preliminary analysis, DOE stated it did not identify any 
small business manufacturers of residential clothes dryers but that it 
did identify at least one room air conditioner manufacturer that was 
designated as a small business by the U.S. Small Business 
Administration criteria. DOE requested comment on this assertion. AHAM 
stated that it agreed with DOE's assessment regarding the number of 
small businesses for room air conditioners and clothes dryers. (AHAM, 
No. 25 at p. 12) Whirlpool similarly stated that it did not know of any 
qualifying small businesses for residential clothes dryers. (Whirlpool, 
No. 22 at p. 4) HTC, however, stated that it is a small business 
registered under the Central Contracting Registration and the 
appropriate NAICS code for the residential clothes dryers covered by 
this rulemaking (335224--household laundry equipment manufacturers). 
HTC requested consideration by DOE as a small business and asserted 
that it would be negatively impacted if DOE decided not to include its 
technologies in the standards for residential clothes dryers (HTC, No. 
FDMS DRAFT 0068 at pp. 6, 10)
    For clothes dryers, DOE notes that it could not locate HTC as a 
small business on the SBA Web site (http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm) or under the Central Contracting Registration (https://www.bpn.gov/CCRSearch/Search.aspx). DOE does not question HTC's 
assertion that it is a small business, but DOE does not believe that 
HTC would be directly impacted by this rule. HTC has developed a 
technology that can be

[[Page 22522]]

incorporated into clothes dryers. DOE acknowledges in section IV.A.5.a 
that HTC's technology is a potential design option but also notes this 
technology is not commercially available. DOE does not believe this 
rulemaking would affect HTC's ability to commercialize or sell its 
technology. Therefore, DOE does not believe HTC will be impacted by 
this rulemaking.
    For room air conditioners, DOE amends its conclusion of the number 
of small manufacturers in today's direct final rule. The one 
manufacturer previously identified by DOE as a small business was since 
acquired by a company and exceeds the 750-employee threshold under 
NAICS code 333415 (air conditioning and warm air heating equipment 
manufacturers and commercial and industrial refrigeration equipment 
manufacturers). As such, DOE believes there are no qualifying small 
business manufacturers in the room air conditioner industry.
    For more information on the potential impact on small business 
manufacturers, see section VI.B.
b. Cumulative Regulatory Burden
    Several interested parties responded to DOE's request for comment 
during the preliminary analysis period on regulations that could impose 
a burden on manufacturers of clothes dryers and room air conditioners. 
BSH stated that DOE should consider potential greenhouse gas 
regulations and the EPA ban on hydrochlorofluorocarbon (HCFC) 
refrigerants in new products since these regulations are relevant for 
heat pump clothes dryers. (BSH, No. 23 at p. 5) In contrast, NPCC 
stated that DOE should not include the cost of converting to 
alternative refrigerants such as R-410A in its manufacturer impact 
analysis for room air conditioners since the HCFC ban has already taken 
effect. (NPCC, No. 32 at p. 4)
    DOE acknowledges that the phase-out of hydrofluorocarbons (HFC) or 
similar refrigerants could necessitate changes to heat pump clothes 
dryers if current products offered on the market have to be redesigned. 
DOE also notes that the most efficient electric clothes dryers on the 
U.S. market today do not use heat pump technology, so a change in the 
available refrigerants would not currently impact products on the U.S. 
market. Because heat pump technology passed the screening criteria, it 
is analyzed as in technology that could increase the efficiency of 
residential clothes dryers. DOE has analyzed heat pump clothes dryers 
as the max-tech units for electric clothes dryer product classes. In 
its engineering analysis for these relevant product classes, DOE 
assumed that these products would utilize refrigerants that are 
currently available on the market. However, DOE does not include the 
impacts of a potential change in available refrigerant for heat pump 
clothes dryers because it would be speculative to predict the passage 
of legislation or the outcome of future rulemakings that would alter 
available refrigerants.
    In response to the inclusion of the ban on HCFC refrigerants, DOE 
notes that the ban is relevant to both heat pump clothes dryer 
manufactures and room air conditioner manufacturers. The ban on R-22 
became effective on January 1, 2010, so all products currently produced 
must comply with this regulation. This ban, which required 
manufacturers to cease using virgin R-22 in new equipment, necessitated 
substantial product design changes and capital investments. DOE 
accounts for these design changes in its engineering analysis by basing 
its analysis for room air conditioners on the use of R-410A 
refrigerant, as described in section IV.C.2.b. This allows DOE to 
capture the impacts of the refrigerant change on product cost and 
efficiency.
    The ban also caused manufacturers to incur significant product and 
capital conversion costs. Manufacturers had to redesign units for new 
compressors and other new components and conduct extensive testing, and 
in some cases manufacturers devoted full-time engineering resources to 
this conversion for up to 2 years. Additionally, manufacturers had to 
purchase new heat exchanger equipment and make other capital 
investments. DOE did not include the costs of converting to alternative 
refrigerants in the GRIM because these changes were not driven by the 
standards established in today's final rule. DOE describes the HCFC ban 
in further detail as part of the cumulative regulatory burden in 
chapter 12 of the direct final rule TSD.
    Several manufacturers also responded to DOE's request for comment 
on the UL fire safety regulation for clothes dryers. Whirlpool stated 
that this regulation has no effect on energy efficiency, but added that 
DOE should include it as a regulatory burden. (Whirlpool, No. 22 at p. 
2) BSH noted that the regulation takes effect in 2013. (BSH, No. 23 at 
p. 6) ALS speculated that each clothes dryer manufacturer will have its 
own concerns about this regulation and its impacts. (ALS, Public 
Meeting Transcript, No. 21.4 at p. 154) HTC stated that it has 
successfully passed UL 2158 safety guidelines for electric clothes 
dryers and requested consideration of this compliance. (HTC, No. FDMS 
DRAFT 0068 at p. 7)
    DOE appreciates this input on the UL fire safety regulations for 
clothes dryers. While DOE did not receive enough information to 
calculate the cost of changes to baseline clothes dryers to comply with 
UL 2158 in the engineering analysis, DOE agrees with Whirlpool that 
this regulation would not impact energy efficiency and consequently 
would not change the incremental costs calculated in the engineering 
analysis. While the UL 2158 is not a Federal regulation, UL 
certification is a de facto requirement for selling products in the 
U.S. because of local building codes requiring all installed products 
meet safety regulations and to avoid litigation. DOE included the 
conversion costs for manufacturers to comply with UL 2158 as part of 
the cumulative regulatory burden.
    Additional information on the cumulative regulatory burden on 
clothes dryer and room air conditioner manufacturers is included in 
chapter 12 of the direct final rule TSD, including details on how DOE 
treated the conversion costs for the UL 2158 regulation.
c. Employment Impacts
    Two interested parties commented on DOE's characterization of the 
domestic employment impacts for room air conditioner manufacturers. EEI 
stated that if DOE concluded no room air conditioner production remains 
in the United States, there should be no domestic impacts on 
employment. EEI stated that further analysis may be necessary to 
capture impacts on these manufacturers. (EEI, Public Meeting 
Transcript, No. 21.4 at pp. 31-34) To follow up on this issue, GE 
stated that revenue from non-domestic manufacturing helps fund the R&D 
and domestic production of other products that room air conditioner 
manufacturers produce. Therefore, the effects of room air conditioner 
manufacturing spill over into other industries. (GE, Public Meeting 
Transcript, No. 21.4 at pp. 33-34)
    DOE's direct employment impact assessment focuses on domestic 
employment impacts. These employment impacts are calculated in the GRIM 
based on the domestic expenditures and labor content of room air 
conditioner production. Because all room air conditioners are 
manufactured abroad, any change in labor content resulting from amended 
standards would impact labor requirements in non-domestic facilities 
and would not be quantified in DOE's direct employment impact 
assessment. While many room air conditioner manufacturers produce other 
products

[[Page 22523]]

and a company's revenues in one industry may impact its overall 
revenues and operations, DOE does not analyze spillover effects among 
different business segments in its direct employment impact assessment. 
DOE does analyze indirect employment impacts in the domestic economy in 
section IV.J.
4. Manufacturer Interviews
    DOE interviewed manufacturers representing more than 90 percent of 
clothes dryer sales and approximately 50 percent of room air 
conditioner sales. These interviews were in addition to those DOE 
conducted as part of the engineering analysis. DOE used these 
interviews to tailor the GRIM to incorporate unique financial 
characteristics for each 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 direct 
final rule TSD for additional information on the MIA interviews.
    The following sections describe the most significant issues 
identified by manufacturers.
a. Clothes Dryer Key Issues
Test Procedure
    Manufacturers indicated that a key concern for this rulemaking was 
ensuring that the test procedure accurately measured actual energy use. 
In particular, manufacturers indicated that proposed changes to the RMC 
value and the average number of annual cycles needed to be updated. 
Manufacturers indicated that without these changes, consumers could be 
negatively impacted by amended energy conservation standards because 
clothes dryers have a limited number of improvements that would be cost 
effective for most consumers.
UL Fire Containment Standard
    Most manufacturers indicated that they had not fully investigated 
the exact technical changes that will be required to meet the UL fire 
containment regulation (UL 2158). However, manufacturers were concerned 
that this regulation would require changes to all their products around 
the same time that they would be required to meet the amended energy 
conservation standard. Most manufacturers agreed that even if the exact 
approach of meeting UL 2158 is different or unknown by individual 
manufactures, DOE should still treat the regulation as an overall 
burden.
Heat Pump Technology
    Manufacturers indicated that the high capital conversion and 
product conversion costs for clothes dryers at the second gap fill 
levels or the maximum available units were significant and would 
represent a substantial burden. Manufacturers also indicated that the 
pathways to meeting those levels, while potentially costly, were well-
defined, proven in the market, and could be made within their existing 
production facilities. Manufacturers also indicated, however, that heat 
pump technology at the max-tech levels for electric product classes 
would represent a significant departure from current products and add 
significantly to the product and capital conversion costs. A heat pump 
standard would require a total renovation of existing facilities. The 
changes required to manufacture heat pumps would require revamping most 
existing production equipment and redesigning a new platform. The 
capital conversion costs would include equipment for new drum lines, 
assembly line testing equipment, stamping equipment for cabinets, and 
other production equipment to manufacturer the sealed systems. In 
addition to the large development costs to develop new platforms, 
manufacturers would have the additional expense of developing the 
sealed system. Other increases to the product development costs for 
heat pump clothes dryers that concerned manufacturers were the 
significant retraining costs for their servicers and the marketing 
costs to educate consumers and ensure they accept the new technology. 
With the substantial change that would be required to develop, 
manufacture, and educate consumers about heat pump clothes dryers, 
manufacturers were concerned they might not be able to make all the 
required changes with a 3-year lead time between the announcement of 
the final rule and the compliance date of the amended energy 
conservation.
    Manufacturers also indicated that an energy conservation standard 
at a level that effectively required a heat pump clothes dryer would 
force them to consider off-shoring any remaining production in the 
United States. Besides the significant capital and product conversion 
costs, manufacturers indicated that the much higher labor content of a 
heat pump clothes dryer would put additional pressure on moving 
production out of the United States. Finally, manufacturers believed 
that repair and maintenance costs would increase if an energy 
conservation standard effectively required heat pump clothes dryers. 
Repair and maintenance costs would increase due to the more expensive 
components, potential lint management problems, and some manufacturers' 
inexperience with the technology.
Impacts on Profitability
    Manufacturers indicated that an amended energy conservation 
standard would likely impact profits in the clothes dryer market. 
Because there is currently no energy label requirement and no ENERGY 
STAR program for clothes dryers, manufacturers indicated that, unlike 
clothes washers, efficiency does not command any premium in the market 
(either in percentage or absolute terms). Because it is difficult to 
communicate any energy benefit to consumers, it is very unlikely that 
they could benefit from higher production costs caused by amended 
energy conservation standards.
    In addition, manufacturers indicated that the large incremental 
cost jumps at some of the higher efficiency levels, including heat pump 
clothes dryers, were unlikely to be fully passed on to their customers. 
Beside the inability to show the energy benefit of the products, 
manufacturers indicated that the concentrated number of players in the 
retail market would put pressure on all manufacturers to keep costs 
down in response to amended energy conservation standards. 
Manufacturers also indicated that many of their sales are from pairs of 
clothes washers and dryers that have similar price points. If the cost 
of clothes dryers increased, manufacturers felt that retailers would 
not accept any price increase to keep the retail prices of the matched 
pair similar.
b. Room Air Conditioner Key Issues
Impact on Manufacturer Profitability
    Several manufacturers stated that they expect amended energy 
conservation standards to negatively impact the profitability of room 
air conditioners. Higher component, tooling, and development costs for 
more efficient products would increase MPCs, but manufacturers believed 
these higher costs could not necessarily be passed on to consumers due 
to the nature of the industry. A few large retailers dominate the 
industry and exert downward pressure on prices. Retailers demand low 
prices because consumers have come to expect room air conditioners at 
particular price points. For example, consumers expect many product 
offerings of product class 1 for under $100, and retailers have 
successfully maintained that price point through competitive bidding. 
This has resulted

[[Page 22524]]

in price pressure on the most popular units as manufacturers accept 
lower absolute profit on those units in the hopes of making a larger 
per unit profit on other more costly products. Many room air 
conditioner purchases are weather-dependent, so consumers could easily 
forgo the purchase of a room air conditioner unit altogether if prices 
increased. Consequently, manufacturers believed that cost increases 
would be at least partly absorbed by manufacturers to keep retail 
prices from rising sharply.
    If amended energy conservation standards led to a significant 
reduction in profitability, some manufacturers could exit the market 
(as a number of large players have in recent years). Many manufacturers 
source room air conditioner lines from overseas and do not own the 
production equipment. This arrangement would allow manufacturers to 
exit the industry without stranded assets.
Impact on Product Utility
    Manufacturers believed a negative profitability impact could also 
indirectly affect product utility. Several manufacturers indicated that 
other features that do not affect efficiency could be removed or 
component quality could be sacrificed to meet amended standard levels 
and maintain product prices at levels that would be acceptable to 
consumers.
    Manufacturers also expressed concern that the energy savings from 
more stringent energy conservation standards would not be great enough 
to justify passing through the added costs to consumers. Currently, 
manufacturers bundle higher efficiency with other desirable features to 
justify higher prices for ENERGY STAR models. According to 
manufacturers, if amended standards caused prices to increase, the 
lower operating costs would not justify higher prices because the 
energy savings would be low compared to the initial price of the unit. 
Therefore, the increased cost of meeting the amended efficiency 
requirements may cause manufacturers to reduce the number of features 
to retain a reasonable price point.
    The value of future ENERGY STAR levels is also a concern for 
manufacturers. Many retailers and other distribution channels require 
ENERGY STAR products. Because the features bundled with ENERGY STAR 
products are the selling point to consumers, manufacturers were 
concerned that a higher ENERGY STAR level after amended standards would 
result in products with fewer features.
    Manufacturers also stated that the financial burden of developing 
products to meet amended energy conservation standards has an 
opportunity cost due to limited capital and R&D dollars. Investments 
incurred to meet amended energy conservation standards reflect foregone 
investments in innovation and the development of new features that 
consumers value and on which manufacturers earn higher absolute profit.
Component Availability
    Several manufacturers stated they were concerned about component 
availability. Compressor availability since the conversion to R-410A 
was the main problem cited by manufacturers. Some manufacturers stated 
that component suppliers do not give priority to room air conditioning 
because the market is exclusive to North America and smaller than some 
of the other markets they supply. Since the conversion R-410A, 
manufacturers noted the total production capacity of compressor 
suppliers has not fully rebounded. In addition, compressor suppliers 
have yet to offer the same range of compressor capacities and 
efficiency tiers.
Size Constraints
    A number of manufacturers expressed concerns about physical 
limitations of how large room air conditioners could grow. Most 
residential buildings have standardized window openings. Because a 
large portion of air conditioners are installed in these standardized 
openings, products must still fit in these typical windows after they 
have been redesigned. Manufacturers were largely concerned that the 
limited opportunity for growth also limited opportunities for 
efficiency improvements. Increasing the size of units also presents a 
problem for smaller air conditioners, which typically operate at under 
10,000 Btu/hr. Much of the appeal of these units is that they can be 
lifted and installed by one person. Increasing the size of these units 
would greatly alter the market and may cause consumers to purchase less 
efficient portable air-conditioning units.
    Manufacturers mentioned refrigerant charge as another reason why 
room air conditioners are constrained by size. If manufacturers used 
increased coil size and a smaller compressor capacity to improve 
efficiency, the larger heat exchangers combined with the reduced 
nominal compressor capacity could lead to a system refrigerant charge 
amount that exceeds the recommended level. Exceeding recommended charge 
levels could damage the compressor, thereby limiting the extent of 
efficiency improvements associated with coil size growth. To counteract 
the increase in charge levels, some manufacturers have used smaller 
tubing in their heat exchangers. However, North American suppliers are 
not currently properly equipped to support smaller tube sizes and might 
not be willing to make the investment required to do so.
    Several manufacturers stated that size is also a concern because 
moving from a smaller chassis to larger chassis would cause material 
costs to increase dramatically due to more costly components and the 
potential capital costs required for development. If the adopted 
standards required significant rather than incremental increases in 
efficiency, the largest units in each capacity range would likely have 
to move to the next largest or a new chassis in order to meet the 
required efficiency levels. This is a notable concern for capacities 
above 28,000 Btu/hr because manufacturers could choose to no longer 
offer these product lines due to the conversion cost.
    Numerous manufacturers stated that size constraints pose a problem 
for non-louvered units in particular. Non-louvered units inherently 
have less room for efficiency improvement because they need to fit into 
the existing sleeves in buildings. They are also constrained by air 
flow, increasing the depth does not result in significant efficiency 
gains because air on the condenser side must still flow through the 
rear face. Additionally, increasing depth creates a product that is 
less aesthetically pleasing and could decrease the available space in 
the room.
Product Switching
    Some manufacturers noted that higher consumer prices after an 
amended energy conservation standard could result in product switching 
along the upper capacity boundaries of a product class if efficiency 
requirements are not implemented proportionally across product classes. 
For example, if after energy conservation standards are amended the 
first cost of units in product class 1 is not proportionally lower than 
units in product class 3, consumers who would have purchased product 
class 1 units are likely to purchase less efficient, slightly higher 
capacity units in product class 3. Without a significant price 
differential between product classes, consumers would be more likely to 
buy units with higher capacity, potentially lowering the calculated 
energy savings.

J. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard.

[[Page 22525]]

Employment impacts consist of direct and indirect impacts. Direct 
employment impacts are any changes in the number of employees of 
manufacturers of the appliance products that are the subject of this 
rulemaking, their suppliers, and related service firms. Indirect 
employment impacts are changes in national employment that occur due to 
the shift in expenditures and capital investment caused by the purchase 
and operation of more efficient appliances. The MIA discussed above in 
Section IV.I. addresses the direct employment impacts that concern 
manufacturers of clothes dryers and room air conditioners. The 
employment impact analysis addresses the indirect employment 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, due to: (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. DOE expects the net monetary savings from 
standards to be redirected to other forms of economic activity. DOE 
also expects these shifts in spending and economic activity to affect 
the demand for labor in the short term, as explained below.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sectoral 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (BLS).\54\ 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. 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.\55\
---------------------------------------------------------------------------

    \54\ 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 e-mail to <a href="/cdn-cgi/l/email-protection#9cf8f5ecefebf9fedcfef0efb2fbf3ea"><span class="__cf_email__" data-cfemail="aacec3dad9ddcfc8eac8c6d984cdc5dc">[email protected]</span></a>. Available at: http://www.bls.gov/news.release/prin1.nr0.htm.
    \55\ See: Bureau of Economic Analysis. Regional Multipliers: A 
User Handbook for the Regional Input-Output Modeling System (RIMS 
II). 1192. U.S. Department of Commerce: Washington, DC.
---------------------------------------------------------------------------

    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 clothes dryers and room air conditioners.
    For the standard levels considered in today's direct final rule, 
DOE estimated indirect national employment impacts using an input/
output model of the U.S. economy called Impact of Sector Energy 
Technologies (ImSET). ImSET is a spreadsheet model of the U.S. economy 
that focuses on 187 sectors most relevant to industrial, commercial, 
and residential building energy use.\56\ ImSET is a special purpose 
version of the ``U.S. Benchmark National Input-Output'' (I-O) model, 
which has been designed to estimate the national employment and income 
effects of energy-saving technologies. The ImSET software includes a 
computer-based I-O model with structural coefficients to characterize 
economic flows among the 187 sectors. ImSET's national economic I-O 
structure is based on a 2002 U.S. benchmark table, specially aggregated 
to the 187 sectors. DOE estimated changes in expenditures using the NIA 
spreadsheet. Using ImSET, DOE then estimated the net national, indirect 
employment impacts by sector of potential amended efficiency standards 
for clothes dryers and room air conditioners.
---------------------------------------------------------------------------

    \56\ J.M. Roop, M.J. Scott, and R.W. Schultz. ImSET 3.1: Impact 
of Sector Energy Technologies. 2009. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-18412. Available at: http://www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf.
---------------------------------------------------------------------------

    For more details on the employment impact analysis and the results 
of this analysis, see direct final rule TSD chapter 13.

K. Utility Impact Analysis

    The utility impact analysis estimates several important effects on 
the utility industry of the adoption of new or amended standards. For 
this analysis, DOE used the NEMS-BT model to generate forecasts of 
electricity consumption, electricity generation by plant type, and 
electric generating capacity by plant type, that would result from each 
TSL. DOE obtained the energy savings inputs associated with efficiency 
improvements to considered products from the NIA. DOE conducts the 
utility impact analysis as a scenario that departs from the latest AEO 
Reference case. In the analysis for today's rule, the estimated impacts 
of standards are the differences between values forecasted by NEMS-BT 
and the values in the AEO2010 Reference case.
    As part of the utility impact analysis, DOE used NEMS-BT to assess 
the impacts on electricity prices of the reduced need for new electric 
power plants and infrastructure projected to result from the considered 
standards. In NEMS-BT, changes in power generation infrastructure 
affect utility revenue requirements, which in turn affect electricity 
prices. DOE estimated the change in electricity prices projected to 
result over time from each TSL. For further discussion, see section 
IV.G.5.
    For more details on the utility impact analysis and the results of 
this analysis, see chapter 14 of the direct final rule TSD.

L. Environmental Assessment

    Pursuant to the National Environmental Policy Act and the 
requirements of 42 U.S.C. 6295(o)(2)(B)(i)(VI), DOE prepared an 
environmental assessment (EA) of the impacts of the standards for 
clothes dryers and room air conditioners in today's direct final rule, 
which it has included as chapter 15 of the direct final rule TSD. DOE 
found that the environmental effects associated with the standards for 
clothes dryers and room air conditioners were not significant. 
Therefore, DOE issued a Finding of No Significant Impact (FONSI) 
pursuant to NEPA, the regulations of the Council on Environmental 
Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance 
with NEPA (10 CFR part 1021). The FONSI is available in the docket for 
this rulemaking.
    In the EA, DOE estimated the reduction in power sector emissions of 
CO<INF>2</INF>, NO<INF>X</INF>, and Hg using the NEMS-BT computer 
model. In the EA, NEMS-BT is run similarly to the AEO NEMS, except that 
clothes dryer and room air conditioner energy use is reduced by the 
amount of energy saved (by fuel type) due to each TSL. The inputs of 
national energy savings come from the NIA spreadsheet model, while the 
output is the forecasted physical emissions. The net benefit of each 
TSL in today's direct final rule is the difference between the 
forecasted emissions estimated by NEMS-BT at each TSL and the AEO 2010 
Reference Case. NEMS-BT tracks CO<INF>2</INF> emissions using a 
detailed module that provides results with broad

[[Page 22526]]

coverage of all sectors and inclusion of interactive effects. Because 
the on-site operation of gas clothes dryers requires use of fossil 
fuels and results in emissions of CO<INF>2,</INF> NO<INF>X</INF> and 
sulfur dioxide (SO<INF>2</INF>), DOE also accounted for the reduction 
in these emissions due to standards at the sites where these appliances 
are used.
    DOE has determined that SO<INF>2</INF> emissions from affected 
fossil fuel fired combustion devices (also known as Electric Generating 
Units (EGUs)) are subject to nationwide and regional emissions cap and 
trading programs that create uncertainty about the standards' impact on 
SO<INF>2</INF> emissions. Title IV of the Clean Air Act, 42 U.S.C. 
7401-7671q, sets an annual emissions cap on SO<INF>2</INF> for affected 
EGUs in the 48 contiguous states and the District of Columbia (DC). 
SO<INF>2</INF> emissions from 28 eastern States and DC are also limited 
under the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)), 
which created an allowance-based trading program. Although CAIR has 
been remanded to the EPA by the U.S. Court of Appeals for the District 
of Columbia (DC Circuit), see North Carolina v. EPA, 550 F.3d 1176 (DC 
Cir. 2008), it remains in effect temporarily, consistent with the DC 
Circuit's earlier opinion in North Carolina v. EPA, 531 F.3d 896 (DC 
Cir. 2008). On July 6, 2010, EPA issued the Transport Rule proposal, a 
replacement for CAIR, which would limit emissions from EGUs in 32 
states, potentially through the interstate trading of allowances, among 
other options. 75 FR 45210 (Aug. 2, 2010).
    The attainment of the emissions caps is typically flexible among 
EGUs and is enforced through the use of emissions allowances and 
tradable permits. Under existing EPA regulations, and under the 
Transport Rule if it is finalized, any excess SO<INF>2</INF> emission 
allowances resulting from the lower electricity demand caused by the 
imposition of an efficiency standard could be used to permit offsetting 
increases in SO<INF>2</INF> emissions by any regulated EGU. However, if 
the standard resulted in a permanent increase in the quantity of unused 
emission allowances, there would be an overall reduction in 
SO<INF>2</INF> emissions from the standards. While there remains some 
uncertainty about the ultimate effects of efficiency standards on 
SO<INF>2</INF> emissions covered by the existing cap and trade system, 
the NEMS-BT modeling system that DOE uses to forecast emissions 
reductions currently indicates that no physical reductions in power 
sector emissions would occur for SO<INF>2</INF>.
    A cap on NO<INF>X</INF> emissions, affecting electric generating 
units in the CAIR region, means that standards on clothes dryers and 
room air conditioners may have little or no physical effect on 
NO<INF>X</INF> emissions in the 28 eastern States and the DC covered by 
CAIR, or any states covered by the proposed Transport Rule if the 
Transport Rule is finalized. The standards would, however, reduce 
NO<INF>X</INF> emissions in those 22 States not affected by the CAIR. 
As a result, DOE used NEMS-BT to forecast emission reductions from the 
standards considered for today's direct final rule.
    Similar to emissions of SO<INF>2</INF> and NO<INF>X</INF>, future 
emissions of Hg would have been subject to emissions caps. In May 2005, 
EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18, 
2005). CAMR would have permanently capped emissions of mercury for new 
and existing coal-fired power plants in all States by 2010. However, on 
February 8, 2008, the DC Circuit issued its decision in New Jersey v. 
Environmental Protection Agency, in which it vacated CAMR. 517 F.3d 574 
(DC Cir. 2008). EPA has decided to develop emissions standards for 
power plants under the Clean Air Act (Section 112), consistent with the 
DC Circuit's opinion on the CAMR. See http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf. Pending EPA's 
forthcoming revisions to the rule, DOE is excluding CAMR from its 
environmental assessment. In the absence of CAMR, a DOE standard would 
likely reduce Hg emissions and DOE plans to use NEMS-BT to estimate 
these emission reductions. However, DOE continues to review the impact 
of rules that reduce energy consumption on Hg emissions, and may revise 
its assessment of Hg emission reductions in future rulemakings.
    The operation of gas clothes dryers requires use of fossil fuels 
and results in emissions of CO<INF>2</INF>, NO<INF>X</INF>, and 
SO<INF>2</INF> at the sites where these appliances are used. NEMS-BT 
provides no means for estimating such emissions. DOE calculated the 
effect of the standards in today's rule on the above site emissions 
based on emissions factors derived from the literature.
    Commenting on the preliminary TSD, AHAM stated that if DOE includes 
values for CO<INF>2</INF> reductions, it should also include 
CO<INF>2</INF> emissions that result indirectly from changes in a 
standard, including increased manufacturing emissions, increased 
transportation emissions, and reduced carbon emissions from peak load 
reductions. (AHAM, No. 25 at p. 12) In response, DOE notes that the 
inputs to the EA for national energy savings come from the NIA. In the 
NIA, DOE accounts for only the primary energy savings associated with 
considered standards. In so doing, EPCA directs DOE to consider (when 
determining whether a standard is economically justified) ``the total 
projected amount of energy * * * savings likely to result directly from 
the imposition of the standard.'' 42 U.S.C. 6295(o)(2)(B)(i)(III) DOE 
interprets ``directly from the imposition of the standard'' to include 
energy used in the generation, transmission, and distribution of fuels 
used by appliances. In addition, DOE is evaluating the full-fuel-cycle 
measure, which includes the energy consumed in extracting, processing, 
and transporting primary fuels (see section IV.G.3). Both DOE's current 
accounting of primary energy savings and the full-fuel-cycle measure 
are directly linked to the energy used by appliances. In contrast, 
energy used in manufacturing and transporting appliances is a step 
removed from the energy used by appliances. Thus, DOE did not consider 
such energy use in either the NIA or the EA. DOE did include 
CO<INF>2</INF> emissions reductions resulting from projected impacts of 
revised standards on electricity demand.

M. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this direct final rule, DOE 
considered the estimated monetary benefits likely to result from the 
reduced emissions of CO<INF>2</INF> NO<INF>X</INF> that are expected to 
result from each of the TSLs considered. In order to make this 
calculation similar to the calculation of the NPV of consumer benefit, 
DOE considered the reduced emissions expected to result over the 
lifetime of products 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 benefits estimates considered.
    For today's direct final rule, DOE is relying on a set of values 
for the social cost of carbon (SCC) that was developed by an 
interagency process. A summary of the basis for these values is 
provided below, and a more detailed description of the methodologies 
used is provided in appendix 15-A of the direct final rule TSD.
1. Social Cost of Carbon
    Under 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

[[Page 22527]]

presented here is to allow agencies to incorporate the monetized social 
benefits of reducing CO<INF>2</INF> emissions into cost-benefit 
analyses of regulatory actions that have small, or ``marginal,'' 
impacts on cumulative global emissions. 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
    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 increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide.
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council \57\ 
points out that any assessment will suffer from uncertainty, 
speculation, and lack of information about (1) future emissions of 
greenhouse gases, (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 serious questions of science, economics, and ethics and should be 
viewed as provisional.
---------------------------------------------------------------------------

    \57\ National Research Council. Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use. National Academies Press: 
Washington, DC. 2009.
---------------------------------------------------------------------------

    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Consistent with the directive quoted 
above, the purpose of the SCC estimates presented here is to make it 
possible for agencies to incorporate the social benefits from reducing 
carbon dioxide emissions into cost-benefit analyses of regulatory 
actions that have small, or ``marginal,'' impacts on cumulative global 
emissions. Most Federal regulatory actions can be expected to have 
marginal impacts on global emissions.
    For such policies, 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 value 
appropriate for that year. The net present value 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. This 
approach assumes that the marginal damages from increased emissions are 
constant for small departures from the baseline emissions path, an 
approximation that is reasonable for policies that have effects on 
emissions that are small relative to cumulative global carbon dioxide 
emissions. For policies that have a large (non-marginal) impact on 
global cumulative emissions, there is a separate question of whether 
the SCC is an appropriate tool for calculating the benefits of reduced 
emissions. DOE does not attempt to answer that question here.
    At the time of the preparation of this notice, the most recent 
interagency estimates of the potential global benefits resulting from 
reduced CO<INF>2</INF> emissions in 2010, expressed in 2009$, were 
$4.9, $22.1, $36.3, and $67.1 per metric ton avoided. For emission 
reductions that occur in later years, these 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,\58\ although preference is 
given to consideration of the global benefits of reducing 
CO<INF>2</INF> emissions.
---------------------------------------------------------------------------

    \58\ 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.
---------------------------------------------------------------------------

    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. Specifically, the interagency group has set a preliminary 
goal of revisiting the SCC values within 2 years or at such time as 
substantially updated models become available, and to continue to 
support research in this area. 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. Social Cost of Carbon Values Used in Past Regulatory Analyses
    To date, economic analyses for Federal regulations have used a wide 
range of values to estimate the benefits associated with reducing 
carbon dioxide emissions. In the final model year 2011 CAFE rule, the 
Department of Transportation (DOT) used both a ``domestic'' SCC value 
of $2 per ton of CO<INF>2</INF> and a ``global'' SCC value of $33 per 
ton of CO<INF>2</INF> for 2007 emission reductions (in 2007 dollars), 
increasing both values at 2.4 percent per year.\59\ See Average Fuel 
Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74 
FR 14196 (March 30, 2009); Final Environmental Impact Statement 
Corporate Average Fuel Economy Standards, Passenger Cars and Light 
Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy). It also included a sensitivity analysis 
at $80 per ton of CO<INF>2</INF>. A domestic SCC value is meant to 
reflect the value of damages in the United States resulting from a unit 
change in carbon dioxide emissions, while a global SCC value is meant 
to reflect the value of damages worldwide.
---------------------------------------------------------------------------

    \59\ Values per ton of CO<INF>2</INF> given in this section 
refer to metric tons.
---------------------------------------------------------------------------

    A 2008 regulation proposed by DOT assumed a domestic SCC value of 
$7 per ton of CO<INF>2</INF> (in 2006 dollars) for 2011 emission 
reductions (with a range of $0-$14 for sensitivity analysis), also 
increasing at 2.4 percent per year. See Average Fuel Economy Standards, 
Passenger Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352 
(May 2, 2008); Draft Environmental Impact Statement Corporate Average 
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years 
2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and 
packaged terminal heat pumps finalized by DOE in October of 2008 used a 
domestic SCC range of $0 to $20 per ton CO<INF>2</INF> for 2007 
emission reductions (in 2007 dollars). 73 FR 58772, 58814 (Oct. 7, 
2008) In addition, EPA's 2008 Advance Notice of Proposed Rulemaking for 
Greenhouse Gases

[[Page 22528]]

identified what it described as ``very preliminary'' SCC estimates 
subject to revision. See Regulating Greenhouse Gas Emissions Under the 
Clean Air Act, 73 FR 44354 (July 30, 2008). EPA's global mean values 
were $68 and $40 per ton CO<INF>2</INF> for discount rates of 
approximately 2 percent and 3 percent, respectively (in 2006 dollars 
for 2007 emissions).
    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 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 CO<INF>2</INF> 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 dollars) of $55, 
$33, $19, $10, and $5 per ton of CO<INF>2</INF>.
    These interim values represent 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 and were offered for 
public comment in connection with proposed rules, including the joint 
EPA-DOT fuel economy and CO<INF>2</INF> tailpipe emission proposed 
rules. See CAFE Rule for Passenger Cars and Light Trucks Draft EIS and 
Final EIS, cited above.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates, which 
were used in this direct final rule. Specifically, the group considered 
public comments and further explored the technical literature in 
relevant fields.
    The interagency group relied on three integrated assessment models 
(IAMs) commonly used to estimate the SCC: The FUND, DICE, and PAGE 
models.\60\ These models are frequently cited in the peer-reviewed 
literature and were used in the last assessment of the 
Intergovernmental Panel on Climate Change. Each model was given equal 
weight in the SCC values that were developed.
---------------------------------------------------------------------------

    \60\ The models are described in appendix 15-A of the final rule 
TSD.
---------------------------------------------------------------------------

    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 SCC values for use in 
regulatory analyses. Three values are based on the average SCC from 
three integrated assessment models, at discount rates of 2.5, 3, and 5 
percent. The fourth value, which represents the 95th percentile SCC 
estimate across all three models at a 3-percent discount rate, is 
included to represent higher-than-expected impacts from temperature 
change further out in the tails of the SCC distribution. For emissions 
(or emission reductions) that occur in later years, these values grow 
in real terms over time, as depicted in Table IV-33.

                                   Table IV-33--Social Cost of CO2, 2010-2050
                                        [In 2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
                                                                                 Discount rate
                                                             ---------------------------------------------------
                                                                5%  Avg      3%  Avg     2.5%  Avg     3%  95th
----------------------------------------------------------------------------------------------------------------
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
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The 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 concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the agencies participating in the 
interagency process to estimate the SCC.
    The U.S. government intends to periodically review and reconsider 
estimates of the SCC used for cost-benefit analyses to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling. In this context, statements 
recognizing the

[[Page 22529]]

limitations of the analysis and calling for further research take on 
exceptional significance. The interagency group offers the new SCC 
values with all due humility about the uncertainties embedded in them 
and with a sincere promise to continue work to improve them.
    In summary, in considering the potential global benefits resulting 
from reduced CO<INF>2</INF> emissions, DOE used the most recent values 
identified by the interagency process, adjusted to 2009$ using the GDP 
price deflator values for 2008 and 2009. For each of the four cases 
specified, the values used for emissions in 2010 were $4.9, $22.1, 
$36.3, and $67.1 per metric ton avoided (values expressed in 2009$). To 
monetize the CO<INF>2</INF> emissions reductions expected to result 
from amended standards for clothes dryers and room air conditioners in 
2014-2043, DOE used the values identified in Table A1 of the ``Social 
Cost of Carbon for Regulatory Impact Analysis Under Executive Order 
12866,'' which is reprinted in appendix 16-A of the direct final rule 
TSD, appropriately adjusted to 2009$.\61\ 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.
---------------------------------------------------------------------------

    \61\ Table A1 presents SCC values through 2050. For DOE's 
calculation, it derived values after 2050 using the 3-percent per 
year escalation rate used by the interagency group.
---------------------------------------------------------------------------

2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NO<INF>X</INF> emissions from the TSLs it considered. As noted above, 
amended energy conservation standards would reduce NO<INF>X</INF> 
emissions in those 22 States that are not affected by the CAIR, in 
addition to the reduction in site NO<INF>X</INF> emissions nationwide. 
DOE estimated the monetized value of NO<INF>X</INF> emissions 
reductions resulting from each of the TSLs considered for today's 
direct final rule based on environmental damage estimates from the 
literature. Available estimates suggest a very wide range of monetary 
values, ranging from $370 per ton to $3,800 per ton of NO<INF>X</INF> 
from stationary sources, measured in 2001$ (equivalent to a range of 
$447 to $4,591 per ton in 2009$).\62\ In accordance with OMB guidance, 
DOE conducted two calculations of the monetary benefits derived using 
each of the economic values used for NO<INF>X</INF>, one using a real 
discount rate of 3 percent and another using a real discount rate of 7 
percent.\63\
---------------------------------------------------------------------------

    \62\ For additional information, refer to 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. Washington, DC.
    \63\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------

    DOE is aware of multiple agency efforts to determine the 
appropriate range of values used in evaluating the potential economic 
benefits of reduced Hg emissions. DOE has decided to await further 
guidance regarding consistent valuation and reporting of Hg emissions 
before it once again monetizes Hg in its rulemakings.
    Commenting on the preliminary TSD, Whirlpool stated that 
CO<INF>2</INF> emissions should not be monetized because the market 
value cannot be readily determined, the impact is negligible, and it is 
already included in energy savings. (Whirlpool, No. 22 at p. 6) DOE 
acknowledges that the market value of future CO<INF>2</INF> emissions 
reductions is uncertain, and for this reason it uses a wide range of 
potential values, as described above. The impact of revised standards 
for room air conditioners and clothes dryers on future CO<INF>2</INF> 
emissions, described in section V.6 of this notice, is not negligible. 
In addition, the value of CO<INF>2</INF> emissions reductions is not 
included in energy cost savings because the energy prices that DOE used 
to calculate those savings do not include any taxes or other charges to 
account for the CO<INF>2</INF> emissions associated with the use of 
electricity or natural gas by the considered appliances.

V. Analytical Results

    The following section addresses the results from DOE's analyses 
with respect to potential energy conservation standards for the 
products examined as part of this rulemaking. It addresses the TSLs 
examined by DOE, the projected impacts of each of these levels if 
adopted as energy conservation standards for clothes dryers and room 
air conditioners, and the standards levels that DOE sets forth in 
today's direct final rule. Additional details regarding the analyses 
conducted by the agency are contained in the publicly available direct 
final rule TSD supporting this notice.

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of a number of TSLs for the 
products that are the subject of today's direct final rule. A 
description of each TSL DOE analyzed is provided below. DOE attempted 
to limit the number of TSLs considered for the final rule by excluding 
efficiency levels that do not exhibit significantly different economic 
or engineering characteristics from the efficiency levels already 
selected as a TSL. While DOE presents the results for only those 
efficiency levels in TSL combinations, DOE presents the results for all 
efficiency levels that it analyzed in chapter 10 of the direct final 
rule TSD.
    Table V-1 presents the TSLs and the corresponding product class 
efficiency levels for clothes dryers. TSL 1 consists of the efficiency 
levels with the largest market share with a positive NPV (at a 3-
percent discount rate). TSL 2 consists of the efficiency levels with 
the highest NPV (at a 3-percent discount rate). TSL 3 consists of the 
efficiency levels with the highest energy savings and a positive NPV 
(at a 3-percent discount rate). TSL 4 consists of the efficiency levels 
that reflect 5-percent efficiency increase above the baseline. TSL 4 
also corresponds to the standards recommended by the Joint Petitioners. 
TSL 5 consists of non heat pump design efficiency levels with the 
highest energy savings. TSL 6 consists of the max-tech efficiency 
levels.

                               Table V-1--Trial Standard Levels for Clothes Dryers
----------------------------------------------------------------------------------------------------------------
                                                                                  CEF
                    Product class                    -----------------------------------------------------------
                                                        TSL 1     TSL 2     TSL 3     TSL 4     TSL 5     TSL 6
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard............................      3.56      3.61      3.73      3.73      4.08      5.42
Vented Electric Compact 120V........................      3.43      3.61      3.61      3.61      4.08      5.41
Vented Electric Compact 240V........................      3.12      3.27      3.27      3.27      3.60      4.89
Vented Gas..........................................      3.16      3.20      3.20      3.30      3.61      3.61
Ventless Electric Compact 240V......................      2.55      2.69      2.69      2.55      2.80      4.03
Ventless Electric Combination Washer/Dryer..........      2.08      2.56      2.56      2.08      2.56      3.69
----------------------------------------------------------------------------------------------------------------


[[Page 22530]]

    Table V-2 presents the TSLs and the corresponding product class 
efficiency levels for room air conditioners. TSL 1 consists of the 
efficiency levels with the largest market share with a positive NPV (at 
a 3-percent discount rate). TSL 2 consists of the ENERGY STAR levels 
for each product class. TSL 3 consists of the efficiency levels with 
the highest NPV (at a 3-percent discount rate). TSL 4 consists of the 
efficiency levels set forth in the Joint Petition presented to DOE. TSL 
5 consists of the efficiency levels with the highest energy savings and 
a positive NPV (at a 7-percent discount rate). TSL 6 consists of the 
max-tech efficiency levels.

                           Table V-2--Trial Standard Levels for Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
                                                                                 CEER
                    Product class                    -----------------------------------------------------------
                                                        TSL 1     TSL 2     TSL 3     TSL 4     TSL 5     TSL 6
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1..............................     10.10     10.60     10.10     11.10     11.10     11.67
Group 2--includes PC 2, 3, 4, 11....................     10.70     10.70     10.90     10.90     11.50     11.96
Group 3--includes PC 5A, 9, 13......................      9.40      9.40      8.47      9.40      8.47     10.15
Group 4--includes PC 5B, 10.........................      9.40      9.40      8.48      9.00      8.48      9.80
Group 5--includes PC 6, 7, 8A, 12...................      9.30      9.30      9.60      9.60     10.00     10.35
Group 6--includes PC 8B, 14, 15, 16.................      9.30      9.30      9.50      9.50      9.50     10.02
----------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
    Consumers affected by new or amended standards usually experience 
higher purchase prices and lower operating costs. Generally, these 
impacts on individual consumers are best captured by changes in life-
cycle costs and by the payback period. Therefore, DOE calculated the 
LCC and PBP analyses for the potential standard levels considered in 
this rulemaking. DOE's LCC and PBP analyses provided key outputs for 
each TSL, which are reported by clothes dryer product class in Table V-
3 through Table V-8, and by room air conditioner product class in Table 
V-9 through Table V-14. Each table includes the average total LCC and 
the average LCC savings, as well as the fraction of product consumers 
for which the LCC will either decrease (net benefit), or increase (net 
cost), or exhibit no change (no impact) relative to the base-case 
forecast. The last output in the tables is the median PBP for the 
consumer purchasing a design that complies with the TSL. DOE presents 
the median PBP because it is the most statistically robust measure of 
the PBP. The results for each potential standard level are relative to 
the efficiency distribution in the base case (no amended standards). 
DOE based the LCC and PBP analyses on the range of energy consumption 
under conditions of actual product use.

                                         Table V-3--LCC and Payback Period Results for Electric Standard Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                               CEF                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................      3.56         $455         $867    $1,323        $0       0.7      97.6       1.7       3.9
2.......................................................      3.61          456          856     1,311         2       0.3      78.7      21.0       0.2
3, 4....................................................      3.73          467          829     1,296        14      19.0      24.8      56.3       5.3
5.......................................................      4.08          583          761     1,343       -30      75.3       1.0      23.7      19.1
6.......................................................      5.42          879          580     1,459      -146      81.0       0.0      19.0      22.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                       Table V-4--LCC and Payback Period Results for Electric Compact 120V Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                               CEF                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................      3.43         $470         $384      $854       n/a         0       100         0       n/a
2, 3, 4.................................................      3.61          471          369       840       $14       4.0       0.0      96.0       0.9
5.......................................................      4.08          627          325       953       -99      95.5       0.0       4.5      36.1
6.......................................................      5.41          875          243     1,118      -264      95.4       0.0       4.6      40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 22531]]


                                       Table V-5--LCC and Payback Period Results for Electric Compact 240V Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                               CEF                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................      3.12         $470         $427      $896       n/a         0       100         0       n/a
2, 3, 4.................................................      3.27          471          411       882        $8       2.3      41.4      56.3       0.9
5.......................................................      3.60          627          373     1,000       -99      93.3       4.2       2.5      45.1
6.......................................................      4.89          875          272     1,147      -246      94.5       0.0       5.5      38.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                Table V-6--LCC and Payback Period Results for Gas Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                               CEF                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................      3.16         $554         $445      $999       n/a         0       100         0       n/a
2, 3....................................................      3.20          555          440       995        $0       0.5      92.9       6.6       2.2
4.......................................................      3.30          555          427       983         2       0.3      84.5      15.2       0.5
5, 6....................................................      3.61          658          404     1,062       -69      87.7      10.5       1.8      73.3
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                           Table V-7--LCC and Payback Period Results for Ventless 240V Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                               CEF                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 4....................................................      2.55       $1,093         $452    $1,545       n/a         0       100         0       n/a
2, 3....................................................      2.69        1,094          431     1,525       $20       0.0       0.0     100.0       0.9
5.......................................................      2.80        1,176          411     1,587       -42      92.5       0.0       7.5      25.3
6.......................................................      4.03        1,462          261     1,722      -177      88.5       0.0      11.5      26.9
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Table V-8--LCC and Payback Period Results for Ventless Combination Washer/Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                               CEF                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 4....................................................      2.08       $1,533         $565    $2,098       n/a         0       100         0       n/a
2, 3, 5.................................................      2.56        1,579          446     2,025       $73      20.6       0.0      79.4       5.3
6.......................................................      3.69        1,981          282     2,263      -166      82.4       0.0      17.6      22.4
--------------------------------------------------------------------------------------------------------------------------------------------------------


                            Table V-9--LCC and Payback Period Results for Room Air Conditioners, < 6,000 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                              CEER                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 3....................................................     10.10         $361         $357      $718        $9      21.2      30.7      48.1       4.1
2.......................................................     10.60          374          341       715        11      32.8      30.7      36.6       5.8
4, 5....................................................     11.10          393          326       719         7      64.6       1.2      34.2       8.6
6.......................................................     11.67          472          311       784       -58      90.4       0.0       9.6      20.9
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 22532]]


                         Table V-10--LCC and Payback Period Results for Room Air Conditioners, 8,000-13,999 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                              CEER                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2....................................................     10.70         $493         $557    $1,050       $16       9.3      60.5      30.2       0.0
3, 4....................................................     10.90          497          547     1,045        22      33.6       2.2      64.1       2.8
5.......................................................     11.50          525          519     1,044        22      55.7       0.8      43.4       7.1
6.......................................................     11.96          605          500     1,104       -38      77.3       0.5      22.2      14.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


                         Table V-11--LCC and Payback Period Results for Room Air Conditioners, 20,000-24,999 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                              CEER                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
3, 5....................................................      8.47         $857         $750    $1,607       n/a         0       100         0       n/a
1, 2, 4.................................................      9.40          887          672     1,559        $6       5.1      85.3       9.6       4.3
6.......................................................     10.15        1,159          626     1,785      -214      97.6       2.1       0.3      73.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


                           Table V-12--LCC and Payback Period Results for Room Air Conditioners, > 25,000 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                              CEER                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
3, 5....................................................      8.48         $979         $823    $1,802       n/a         0       100         0       n/a
4.......................................................      9.00        1,019          777     1,796        $1       8.9      87.6       3.5      10.1
1, 2....................................................      9.40        1,058          739     1,797         1      11.0      85.3       3.7      10.3
6.......................................................      9.80        1,313          712     2,025      -227      99.8       0.0       0.2     107.7
--------------------------------------------------------------------------------------------------------------------------------------------------------


                        Table V-13--LCC and Payback Period Results for Room Air Conditioners, 8,000-10,999 Btu/h, Without Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                              CEER                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2....................................................      9.30         %495         $490      $986        $4       0.9      89.9       9.2       1.5
3, 4....................................................      9.60          498          476       974        13      12.3      25.2      62.5       2.1
5.......................................................     10.00          512          454       966        20      38.0       5.6      56.3       4.9
6.......................................................     10.35          615          440     1,055       -66      91.8       1.9       6.2      25.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


                          Table V-14--LCC and Payback Period Results for Room Air Conditioners, > 11,000 Btu/h, Without Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Life-cycle cost 2009$                      LCC savings                Payback
                                                                   ----------------------------------------------------------------------------  period
                                                                                                                   Percent of households that     years
                           TSL                              CEER                  Discounted             Average           experience          ---------
                                                                     Installed    operating      LCC     savings ------------------------------
                                                                        cost         cost                 2009$                No        Net     Median
                                                                                                                  Net cost   impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2....................................................      9.30         $590         $698    $1,288        $5       2.2      89.9       7.9       2.6
3, 4, 5.................................................      9.50          596          684     1,279        11      22.7      30.6      46.6       3.7
                                                              9.80          611          660     1,271        18      36.0      17.3      46.6       5.3

[[Page 22533]]

 
6.......................................................     10.02          707          647     1,354       -64      92.6       0.0       7.3      25.9
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Consumer Subgroup Analysis
    As described in section IV.H, DOE determined the impact of the 
considered TSLs on low-income households and senior-only households.
    Table V-15 and Table V-16 compare the average LCC savings at each 
efficiency level for the two consumer subgroups with the average LCC 
savings for the entire sample for each product class for clothes dryers 
and room air conditioners, respectively. DOE found that 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 direct final rule TSD 
presents the complete LCC and PBP results for the two subgroups.

                         Table V-15--Clothes Dryers: Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Electric standard                                            Vented 120V                           Vented 240V
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Low-                                  Low-                                  Low-
                      CEF                         Senior    income     All      CEF     Senior    income     All      CEF     Senior    income     All
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.56...........................................       $0         $0       $0     3.48       $3         $3       $4     3.16       $2         $2       $2
3.61...........................................        2          2        2     3.61       14         13       14     3.27        9          8        8
3.73...........................................        7         12       14     3.72       -8         -5       -5     3.36       -8         -6       -5
3.81...........................................      -40        -30      -27     3.80      -63        -57      -56     3.48      -54        -47      -47
4.08...........................................      -62        -38      -30     4.08     -113        -99      -99     3.60     -110        -99      -99
5.42...........................................     -245       -170     -146     5.41     -306       -262     -264     4.89     -291       -243     -246
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Gas                     Ventless 240V
                                                         Ventless Combination
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      CEF                         Senior     Low-      All      CEF     Senior     Low-      All      CEF     Senior     Low-      All
                                                            income                                income                                income
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.16...........................................       $0         $0       $0     2.59       $5         $5       $5     2.35      $49        $76      $75
3.20...........................................        2          2        2     2.69       20         19       20     2.38       54         80       79
3.30...........................................       -1          2        2     2.71      -14        -14      -13     2.46       68         93       93
3.41...........................................      -76        -69      -69     2.80      -49        -42      -42     2.56       41         73       73
3.61...........................................     -115       -100     -100     4.03     -234       -175     -177     3.69     -253       -162     -166
--------------------------------------------------------------------------------------------------------------------------------------------------------


                     Table V-16--Room Air Conditioners: Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                         < 6,000 Btu/h, with louvers                            8,000-13,999 Btu/h, with louvers      20,000-24,999 Btu/h, with louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Low-                                  Low-                                  Low-
                      CEER                        Senior    income     All      CEER    Senior    income     All      CEER    Senior    income     All
--------------------------------------------------------------------------------------------------------------------------------------------------------
10.10..........................................       $5        $12       $9    10.20       $8        $10       $9     9.00       $1         $7       $3
10.60..........................................        4         17       11    10.70       13         18       16     9.40        3         13        6
11.10..........................................       -5         17        7    10.90       17         24       22     9.80      -17          8      -10
11.38..........................................      -17          9       -3    11.50       14         27       22    10.15     -223       -187     -214
11.67..........................................      -75        -44      -58    11.96      -49        -31      -38  .......  .......  .........  .......
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        > 25,000 Btu/h, with louve8,000-10,999 Btu/h, without louvers
                                                    > 11,000 Btu/h, without louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                      CEER                        Senior     Low-      All      CEER    Senior     Low-      All      CEER    Senior     Low-      All
                                                            income                                income                                income
--------------------------------------------------------------------------------------------------------------------------------------------------------
9.00...........................................       $0         $4       $1     9.30       $4         $5       $4     9.30       $4         $6       $5
9.40...........................................       -1          7        1     9.60       11         15       13     9.50        9         13       11
9.80...........................................     -234       -209     -227    10.00       16         23       20     9.80       13         21       18
                                                 .......  .........  .......    10.35      -73        -62      -66    10.02      -71        -60      -64
--------------------------------------------------------------------------------------------------------------------------------------------------------

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 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 use calculation on the DOE test procedures for the considered 
products. As a result, DOE calculated a single rebuttable presumption 
payback value, and not a distribution of payback periods, for each 
efficiency level. Table V-17 and Table V-18 present the average 
rebuttable presumption payback periods for those efficiency levels 
where the increased

[[Page 22534]]

purchase cost for a product that meets a standard at that level is less 
than three times the value of the first-year energy savings resulting 
from the standard.

  Table V-17--Clothes Dryers: Efficiency Levels With Rebuttable Payback
                      Period Less Than Three Years
------------------------------------------------------------------------
                                                                   PBP
                    Product class                        CEF     (years)
------------------------------------------------------------------------
Electric standard...................................      3.61      0.95
Electric compact 120V...............................      3.48      2.49
                                                          3.61      0.86
Electric compact 240V...............................      3.16      2.57
                                                          3.27      0.85
Gas.................................................      3.20      1.81
Ventless compact 240V...............................      2.59      2.33
                                                          2.69      0.83
Ventless combination washer/dryers..................      2.46      0.42
                                                          2.46      0.68
                                                          2.46      0.74
------------------------------------------------------------------------


  Table V-18--Room Air Conditioners: Efficiency Levels With Rebuttable
                  Payback Period Less Than Three Years
------------------------------------------------------------------------
                                                                   PBP
                    Product class                       CEER     (years)
------------------------------------------------------------------------
Room Air Conditioners (8000-13,999 Btu/h), with           10.2       1.1
 Louvers............................................
                                                          10.7       1.6
                                                          10.9       1.8
Room Air Conditioners (20,000-24,999 Btu/h), with          9.0       0.9
 Louvers............................................
                                                           9.4       1.1
                                                           9.8       1.9
Room Air Conditioners (> 25,000 Btu/h), with Louvers       9.0       2.1
                                                           9.4       2.4
Room Air Conditioners (8000-10,999 Btu/h), without         9.3       0.6
 Louvers............................................
                                                           9.6       0.7
                                                          10.0       1.3
Room Air Conditioners (> 11,000 Btu/h), without            9.3       1.3
 Louvers............................................
                                                           9.5       1.4
                                                           9.8       1.9
------------------------------------------------------------------------

    While DOE examined the rebuttable-presumption criterion, it 
considered whether the standard levels considered for today's rule are 
economically justified through a more detailed analysis of the economic 
impacts of these levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE to definitively 
evaluate the economic justification for a potential standard level 
(thereby supporting or rebutting the results of any preliminary 
determination of economic justification).
2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of clothes dryers and room air 
conditioners. The section below describes the expected impacts on 
manufacturers at each TSL. Chapter 12 of the direct final rule TSD 
explains the analysis in further detail.
a. Industry Cash Flow Analysis Results
    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. Each set of results below shows 
two tables of INPV impacts: The first table reflects the lower (less 
severe) bound of impacts and the second represents the upper bound. To 
evaluate this range of cash-flow impacts on each industry, DOE modeled 
two different scenarios using different markup assumptions. These 
assumptions correspond to the bounds of a range of market responses 
that DOE anticipates could occur in the standards case. Each scenario 
results in a unique set of cash flows and corresponding industry value 
at each TSL.
    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 (2011) through 
the end of the analysis period. 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 a proxy for the magnitude 
of the required conversion costs, relative to the cash flow generated 
by the industry in the base case.
Cash Flow Analysis Results for Clothes Dryers
    To assess the lower (less severe) end of the range of potential 
impacts on the residential clothes dryer industry, DOE modeled the flat 
markup scenario. The flat markup scenario assumes that in the standards 
case manufacturers would be able to pass the higher productions costs 
required for more efficient products on to their customers. 
Specifically, the industry would be able to maintain its average base-
case gross margin, as a percentage of revenue, despite higher product 
costs. In general, the larger the product price increases, the less 
likely manufacturers are to achieve the cash flow from operations 
calculated in this scenario because the less likely it is that

[[Page 22535]]

manufacturers would be able to fully markup these larger cost 
increases.
    To assess the higher (more severe) end of the range of potential 
impacts on the residential clothes dryer industry, DOE modeled the 
preservation of operating profit markup scenario. The scenario 
represents the upper end of the range of potential impacts on 
manufacturers because no additional operating profit is earned on the 
higher production costs, eroding profit margins as a percentage of 
total revenue.
    DOE used the main NIA shipment scenario for the both the lower- and 
higher-bound MIA scenarios that were used to characterize the potential 
INPV impacts. The shipment forecast is an important driver of the INPV 
results below (Table V-19 and Table V-20). The main NIA shipment 
scenario includes a price elasticity effect, meaning higher prices in 
the standards case result in lower shipments. Lower shipments also 
reduce industry revenue, and, in turn, INPV.

                                    Table V-19--Manufacturer Impact Analysis for Clothes Dryers--Flat Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Trial standard level
                                                     Units             Base case -----------------------------------------------------------------------
                                                                                       1           2           3           4           5           6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV....................................  2009$ millions                 1,003.6     1,001.1     1,000.0       962.5       939.2       827.1       699.7
Change in INPV..........................  2009$ millions              ..........        -2.6        -3.6      -41.13      -64.46      -176.5      -303.9
                                          %                           ..........       -0.3%       -0.4%       -4.1%       -6.4%      -17.6%      -30.3%
Product Conversion Costs................  2009$ millions              ..........           4           5          18          24         166         383
Capital Conversion Costs................  2009$ millions              ..........           0           2          48          71         328         536
                                         ---------------------------------------------------------------------------------------------------------------
    Total Conversion Costs..............  2009$ millions              ..........           4           7          66          95         494         919
--------------------------------------------------------------------------------------------------------------------------------------------------------


                      Table V-20--Manufacturer Impact Analysis for Clothes Dryers--Preservation of Operating Profit Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Trial standard level
                                                    Units              Base case -----------------------------------------------------------------------
                                                                                       1           2           3           4           5           6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...................................  2009$ millions                  1,003.6     1,001.0       998.7       948.2       923.0       606.2       273.6
Change in INPV.........................  2009$ millions               ..........        -2.6          -4      -55.46      -80.63      -397.4      -730.0
                                         %                            ..........       -0.3%       -0.5%       -5.5%       -8.0%      -39.6%      -72.7%
Product Conversion Costs...............  2009$ millions               ..........           4           5          18          24         166         383
Capital Conversion Costs...............  2009$ millions               ..........           0           2          48          71         328         536
                                        ----------------------------------------------------------------------------------------------------------------
    Total Conversion Costs.............  2009$ millions               ..........           4           7          66          95         494         919
--------------------------------------------------------------------------------------------------------------------------------------------------------

    TSL 1 represents the baseline CEF for 120V electric compact clothes 
dryers (product class 2), 240V electric compact clothes dryers (product 
class 3), 240V compact ventless clothes dryers (product class 5), and 
electric combination ventless clothes dryers (product class 6). TSL 1 
represents a CEF of 3.56 for standard-size vented electric clothes 
dryers (product class 1) and a CEF of 3.16 for gas vented clothes 
dryers (product class 4). At TSL 1, DOE estimates impacts on INPV to 
range -$2.55 million to -$2.62 million, or a change in INPV of -0.3 
percent. At this proposed level, industry free cash flow is estimated 
to decrease by approximately 1.6 percent to $68.6 million, compared to 
the base-case value of $69.7 million in the year leading up to the 
proposed energy conservation standards.
    The design options DOE analyzed for product class 1 and 4 include 
lowering standby power consumption only. Standby power changes would 
result in only minor changes to baseline products and would take a 
minimal effort by manufacturers to comply with the amended energy 
conservation standards. The standby power changes at TSL 1 would 
require relatively small product development efforts to reach the CEF 
levels and would not change the assembly of currently products, greatly 
limiting the necessary capital conversion costs. In addition, the 
design options for standby power do not add significant costs to 
existing products. Therefore, the impact on manufacturers is very small 
at TSL 1.
    TSL 2 represents a CEF of 3.61 for product class 1, a CEF of 3.61 
for product class 2, a CEF of 3.27 for product class 3, a CEF of 3.20 
for product class 4, a CEF of 2.69 for product class 5, and a CEF of 
2.56 for product class 6. At TSL 2, DOE estimates impacts on INPV to 
range -$3.6 million to -$4.9 million, or a change in INPV of -0.4 
percent to -0.5 percent. At this proposed level, industry free cash 
flow is estimated to decrease by approximately 3.0 percent to $67.6 
million, compared to the base-case value of $69.7 million in the year 
leading up to the proposed energy conservation standards.
    The design options analyzed at TSL 2 for product classes 1 through 
5 represent improvements to standby power consumption only. The changes 
required at TSL 2 would not greatly alter baseline products for these 
product classes because these analyzed design options are small 
component changes for standby power for product classes 1 through 5. 
The design options analyzed for product class 6 include changes to 
active mode power consumption. However, these active mode changes for 
product class 6 are also relatively minor and would take a minimal 
effort by manufacturers to comply with the amended energy conservation 
standards. For product class 6, the analyzed design option for active 
mode is automatic cycle termination technology which adds very little 
cost to the product and takes minimal capital and product conversion 
costs to implement. Because the changes for product class 1 through 5 
only include standby power changes and the active mode changes for 
product class 6 are minor, the impact on manufacturers is very small at 
TSL 2.
    The efficiency requirements for product classes 2 to 6 are the same 
at TSL 3 as at TSL 2. TSL 3, however, represents a further improvement 
to a CEF of 3.73 for product class 1. At TSL 3, DOE estimates impacts 
on INPV to range from -$41.1 million to -$55.5 million, or a change in 
INPV of -4.1 percent to -5.5 percent. At this proposed level, industry 
free cash flow is estimated to decrease by approximately 34.2 percent 
to $45.9

[[Page 22536]]

million, compared to the base-case value of $69.7 million in the year 
leading up to the proposed energy conservation standards.
    The design options DOE analyzed for product class 1 include 
improvements to standby and active power consumption (airflow 
improvements, a dedicated heater duct, and an open cylinder drum). 
While the actual design path taken by manufacturers could vary at TSL 
3, these technologies represent incremental improvements and are well 
known in the industry. The changes for design options analyzed for 
product class 1 would require both changes to production equipment and 
product development costs. These design options would not greatly alter 
the production process for product class 1 and could be made within 
most existing products. The conversion costs to implement these changes 
are also relatively low compared to the total value of the industry. 
The industry impacts would increase at TSL 3, however, because for 
product class 1, manufacturers would have to make changes for a large 
volume of the common standard-size electric models.
    TSL 4 represents the baseline efficiency for product classes 5 and 
6. TSL 4 also represents the same efficiency requirements for product 
classes 2 and 3 as TSL 2 and TSL 3. TSL 4 also has the same efficiency 
requirements for product class 1 as TSL 3, but represents a 3.30 CEF 
for product class 4. At TSL 4, DOE estimates impacts on INPV to range -
$64.5 million to -$80.6 million, or a change in INPV of -6.4 percent to 
-8.0 percent. At this proposed level, industry free cash flow is 
estimated to decrease by approximately 49.8 percent to $35.0 million, 
compared to the base-case value of $69.7 million in the year leading up 
to the proposed energy conservation standards.
    The impacts at TSL 4 are due primarily to the efficiency 
requirements for product classes 1 and 4 because all other product 
classes are at baseline efficiency or could be met with changes to 
standby power consumption. For both product classes 1 and 4, DOE 
analyzed changes to standby power consumption and the same improvements 
to active mode power consumption for both gas and electric units 
(airflow improvements, a dedicated heater duct, and an open cylinder 
drum). As with TSL 3, while the actual design path taken by 
manufacturers could vary at TSL 4, these technologies represent 
incremental improvements to most products and are well known in the 
industry. Industry impacts would increase at TSL 4, however, because 
for both product classes 1 and 4, the changes would require 
improvements in the most common standard-size gas and electric products 
on the market today. The changes for design options analyzed for 
product class 1 and 4 would require both changes to production 
equipment and product development costs. These design options would not 
greatly alter the production processes for either product class and 
could be made within most existing products. The conversion costs to 
implement these changes for both product class 1 and 4 are still 
relatively low compared to the total value of the industry.
    TSL 5 represents a CEF of 4.08 for product class 1, a CEF of 4.08 
for product class 2, a CEF of 3.60 for product class 3, a CEF of 3.61 
for product class 4, a CEF of 2.80 for product class 5, and a CEF of 
2.56 for product class 6. At TSL 5, DOE estimates impacts on INPV to 
range -$176.5 million to -$397.4 million, or a change in INPV of -17.6 
percent to -39.6 percent. At this proposed level, industry free cash 
flow is estimated to decrease by approximately 249.7 percent to -$104.4 
million, compared to the base-case value of $69.7 million in the year 
leading up to the proposed energy conservation standards.
    Most of the impacts on INPV at TSL 5 are due to the efficiency 
requirements for product classes 1 through 4. Very few products on the 
market today meet the efficiency requirements at TSL 5, and for product 
classes 1 through 4, TSL 5 represents the most efficient units 
currently on the market. The design options DOE analyzed for these 
product classes included similar design options for all product classes 
as for product classes 1 and 4 at TSL 4 (airflow improvements, a 
dedicated heater duct, and an open cylinder drum) plus additional 
changes. In addition to airflow improvements, a dedicated heater duct, 
and an open cylinder drum, the design options analyzed by DOE also 
include modulating heat, inlet air preheating, and a more efficient fan 
motor. Out of all these design options used the reach the required 
efficiencies at TSL 5, inlet air preheating would require the most 
substantial changes to existing products because it would change the 
ducting system. This change would impact drum stamping equipment and, 
possibly, the fabrication of the cabinets for some product lines. The 
impacts also increase dramatically at TSL 5 due to the large increase 
in production costs for the additional design options beyond those 
needed to reach the required efficiencies at TSL 4. The large 
incremental costs result in lower shipments due to the price 
elasticity. These additional costs also cause a greater impact on INPV 
if manufactures are unable to earn additional profit on these added 
costs (under the preservation of operating profit markup scenario).
    TSL 6 represents the max-tech level for all product classes. The 
max-tech level corresponds to a CEF of 5.42 for product class 1, a CEF 
of 5.41 for product class 2, a CEF of 4.89 for product class 3, a CEF 
of 3.61 for product class 4, a CEF of 4.03 for product class 5, and a 
CEF of 3.69 for product class 6. At TSL 6, DOE estimates impacts on 
INPV to range -$303.9 million to -$730.0 million, or a change in INPV 
of -30.3 percent to -72.7 percent. At this proposed level, industry 
free cash flow is estimated to decrease by approximately 467.5 percent 
to -$256.2 million, compared to the base-case value of $69.7 million in 
the year leading up to the proposed energy conservation standards.
    At TSL 6, the efficiency requirements for all electric clothes 
dryers would effectively require a heat pump clothes dryer. Currently, 
there are no heat pump clothes dryers on the market in the United 
States. Manufacturing exclusively heat pump clothes dryers would be 
extremely disruptive to existing manufacturing facilities. A heat pump 
standard would require a total renovation of existing facilities and 
would force the industry to design completely new clothes dryer 
platforms. The capital conversion costs for these changes are extremely 
large--more than double the capital conversion costs calculated for 
these products to meet TSL 5. The product development costs to 
manufacturer heat pump clothes dryers also increase substantially 
because manufacturers must not only redesign clothes washer platforms, 
but also design the heat pump system. Manufacturers also indicated that 
training their service and installation network to use a completely 
different technology would be extremely costly, as would the cost to 
educate consumers. Finally, the impacts on INPV are also great at TSL 6 
because the cost of a heat pump clothes dryer is more than double a 
minimally compliant clothes dryer in the market today. If manufactures 
are unable to earn additional profit on these production costs, 
profitability is severely impacted.
Cash Flow Analysis Results for Room Air Conditioners
    To assess the lower (less severe) end of the range of potential 
impacts on the room air conditioner industry, DOE modeled the flat 
markup scenario. The

[[Page 22537]]

flat markup scenario assumes that in the standards case manufacturers 
would be able to pass the higher productions costs required for more 
efficient products on to their customers. Specifically, the industry 
would be able to maintain its average base-case gross margin, as a 
percentage of revenue, despite higher product costs. In general, the 
larger the product price increases, the less likely manufacturers are 
to achieve the cash flow from operations calculated in this scenario 
because the less likely it is that manufacturers would be able to fully 
markup these larger cost increases.
    To assess the higher (more severe) end of the range of potential 
impacts on the room air conditioner industry, DOE modeled the 
preservation of operating profit markup scenario. Through its 
discussion with manufacturers, DOE found that manufacturers are faced 
with significant market pressure to keep prices low. Consumers are 
accustomed to certain price points for room air conditioners, and they 
could forgo their purchases if prices increased significantly because 
many purchases are weather-dependent impulse buys. As a result, several 
key retailers exert their purchasing power to pressure manufacturers to 
offer product lines at low prices. Higher efficiency units that earn a 
premium in the base case are bundled with additional features that 
drive higher prices. Thus, manufacturers are skeptical that customers 
would accept higher prices for increased energy efficiency because it 
does not command higher margins in the current market. Under such a 
scenario, it follows that the large retailers that compose the 
relatively concentrated customer base of the industry would not accept 
manufacturers fully passing through the additional cost of improved 
efficiency because consumers would be wary of higher prices. Therefore, 
to assess the higher (more severe) end of the range of potential 
impacts, DOE modeled the preservation of operating profit markup 
scenario in which higher energy conservation standards result in lower 
manufacturer markups. This markup is applied to both the minimum 
standard level and the de facto minimally efficient products due to the 
modeled efficiency migration over time. This scenario models 
manufacturers' concerns that the higher costs of more efficient 
technology would harm profitability if the full cost increases cannot 
be passed on. The scenario represents the upper end of the range of 
potential impacts on manufacturers because no additional operating 
profit is earned on the investments required to meet the proposed 
amended energy conservation standards, while higher production costs 
erode profit margins and result in lower cash flows from operations.
    DOE used the main NIA shipment scenario for the both the lower- and 
higher-bound MIA scenarios that were used to characterize the potential 
INPV impacts. The shipment forecast is an important driver of the INPV 
results below (Table V-21 and Table V-22). The main NIA shipment 
scenario includes a price elasticity effect, meaning higher prices in 
the standards case result in lower shipments. Lower shipments also 
reduce industry revenue, and, in turn, INPV.

                                Table V-21--Manufacturer Impact Analysis for Room Air Conditioners--Flat Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Trial standard level
                                               Units                  Base case        -----------------------------------------------------------------
                                                                                            1          2          3          4          5          6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................  2009$ millions.........  956.0..................      911.8      890.6      890.3      844.7      869.5      875.9
Change in INPV......................  2009$ millions.........  .......................     (44.2)     (65.4)     (65.7)    (111.3)     (86.6)     (80.2)
                                      %......................  .......................      -4.6%      -6.8%      -6.9%     -11.6%      -9.1%      -8.4%
Product Conversion Costs............  2009$ millions.........  .......................         22         29         41         61         74        117
Capital Conversion Costs............  2009$ millions.........  .......................         46         69         61        109        101        193
                                     -------------------------------------------------------------------------------------------------------------------
Total Conversion Costs..............  2009$ millions.........  .......................         68         98        102        171        176        310
--------------------------------------------------------------------------------------------------------------------------------------------------------


                  Table V-22--Manufacturer Impact Analysis for Room Air Conditioners--Preservation of Operating Profit Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Trial standard level
                                               Units                  Base case        -----------------------------------------------------------------
                                                                                            1          2          3          4          5          6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................  2009$ millions.........  956.0..................      871.1      843.3      843.6      778.4      771.6      611.5
Change in INPV......................  2009$ millions.........  .......................     (84.9)    (112.7)    (112.4)    (177.6)    (184.4)    (344.5)
                                      %......................  .......................      -8.9%     -11.8%     -11.8%     -18.6%     -19.3%     -36.0%
Product Conversion Costs............  2009$ millions.........  .......................         22         29         41         61         74        117
Capital Conversion Costs............  2009$ millions.........  .......................         46         69         61        109        101        193
                                     -------------------------------------------------------------------------------------------------------------------
Total Conversion Costs..............  2009$ millions.........  .......................         68         98        102        171        176        310
--------------------------------------------------------------------------------------------------------------------------------------------------------

    TSL 1 represents a CEER of 9.30 for product class 8A (without 
reverse cycle and without louvered sides--8,000 to 10,999 Btu/h) and 
product class 8B (without reverse cycle and without louvered sides--
11,000 to 13,999 Btu/h); 9.40 for product class 5A (without reverse 
cycle and with louvered sides--20,000 to 24,999 Btu/h) and product 
class 5B (without reverse cycle and with louvered sides--25,000 Btu/h 
and more); 10.10 for product class 1 (without reverse cycle and with 
louvered sides--less than 6,000 Btu/h); and 10.70 for product class 3 
(without reverse cycle and with louvered sides--8,000 to 13,999 Btu/h). 
At TSL 1, DOE estimates impacts on INPV to range from -$44.2 million to 
-$84.9 million, or a change in INPV of -4.6 percent to -8.9 percent. At 
this proposed level, industry free cash flow is estimated to decrease 
by approximately 27.7 percent to $62.4 million, compared to the base-
case value of $86.3 million in the year leading up to the proposed 
energy conservation standards.
    The INPV impacts at TSL 1 are relatively minor, in part because the 
vast majority of manufacturers produce

[[Page 22538]]

units that exceed this level (such as, ENERGY STAR and other high 
efficiency units) in significant volumes. Approximately 60 percent of 
product class 3 shipments, 85 percent of product class 5A and 5B 
shipments, and 90 percent of product class 8A and 8B shipments 
currently meet this TSL. By contrast, the vast majority of product 
class 1 shipments are baseline units. Although most of the design 
options DOE analyzed at this proposed level are one-for-one component 
swaps, some more complex design options that would be required at TSL 1 
necessitate more substantial changes. These design options that have a 
significant impact on conversion costs at TSL 1 are heat exchanger 
changes and increased chassis volumes. Changes to the condenser or 
evaporator require machinery for new dies for every product line and 
require greater design effort than component swaps. Increased chassis 
volumes require a complete redesign of the product and substantial 
tooling to make the unit larger. Although some room air conditioners, 
particularly those in product class 1, will require these changes at 
TSL 1, these changes would not be required across the entire industry 
because the majority of units in most product classes already meet TSL 
1. As such, DOE estimated total product conversion costs of $22 million 
and capital conversion costs of $46 million, which is relatively low 
compared to the industry value of $956 million.
    The efficiency requirements for product class 3, product class 5A, 
product class 5B, product class 8A, and product class 8B are the same 
at TSL 2 as TSL 1. Thus, the only change from TSL 1 occurs for product 
class 1, which requires a CEER of 10.60 at TSL 2. DOE estimates the 
INPV impacts at TSL 2 range from -$65.4 million to -$112.7 million, or 
a change in INPV of -6.8 percent to -11.8 percent. At this proposed 
level, the industry cash flow is estimated to decrease by approximately 
40.5 percent to $51.4 million, compared to the base-case value of $86.3 
million in the year leading up to the proposed energy conservation 
standard.
    The additional impacts at TSL 2 relative to TSL 1 result from the 
further improvements manufacturers must make to meet a CEER of 10.6 for 
product class 1. Most units in product class 1 would need to increase 
their chassis size even further than at TSL 1 in order to meet TSL 2, 
resulting in estimated product and capital conversion costs of $29 
million and $69 million, respectively.
    TSL 3 represents different efficiency levels for every product 
class compared to TSL 2. TSL 3 represents the baseline CEERs of 8.47 
and 8.48 for product classes 5A and 5B, respectively, meaning that no 
amended standards would be set and no impacts on INPV would occur. TSL 
3 represents a CEER of 9.50 for product class 8B, 9.60 for product 
class 8A, 10.10 for product class 1, and 10.90 for product class 3. DOE 
estimates the INPV impacts at TSL 3 to range from -$65.7 million to -
$112.4 million, or a change in INPV of -6.9 percent to -11.8 percent. 
At this proposed level, the industry cash flow is estimated to decrease 
by approximately 40.5 percent to $51.4 million, compared to the base-
case value of $86.3 million in the year leading up to the standards.
    At TSL 3, several product classes require design options that 
increase conversion costs. For product class 1, some units would 
require increased chassis volumes, though not as substantially as at 
TSL 2. For product class 3, all smaller units would require chassis 
changes, driving the majority of the conversion costs at TSL 3. For 
product classes 8A and 8B, some changes to the heat exchangers would be 
required. However, no conversion costs would be applied to product 
classes 5A and 5B, resulting in total product and capital conversion 
costs at TSL 3 of $41 million and $61 million, respectively.
    TSL 4 represents the same efficiency requirements as TSL 3 for 
product classes 3, 8A, and 8B. For product class 5B, TSL 4 represents a 
CEER of 9.00. For product class 5A, TSL 4 represents a CEER of 9.40, 
and for product class 1, TSL 4 represents a CEER of 11.10. DOE 
estimates the INPV impacts at TSL 4 to range from -$111.3 million to -
$177.6 million, or a change in INPV of -11.6 percent to -18.6 percent. 
At this proposed level, the industry cash flow is estimated to decrease 
by approximately 69.1 percent to $26.7 million, compared to the base-
case value of $86.3 million in the year leading up to the proposed 
energy conservation standards.
    At TSL 4, significant changes to the manufacturing process would be 
required. Product classes 1, 5A, and 5B would all require increased 
chassis volumes, and product classes 1 and 5A would also require heat 
exchanger changes. These design options drive increases of $20 million 
in product conversion costs and $48 million in capital conversion costs 
compared to TSL 3.
    TSL 5 represents the same efficiency requirements as TSL 4 for 
product classes 1 and 8B. For product classes 5A and 5B, TSL 5 
represents the baseline CEERs of 8.47 and 8.48, respectively, so all 
impacts of TSL 4 on these product classes, such as chassis changes, 
would not be required. For product class 8A, TSL 5 represents a CEER of 
10.00, and for product class 3, TSL 5 represents a CEER of 11.50. DOE 
estimates the INPV impacts at TSL 5 to range from -$86.6 million to -
$184.4 million, or a change in INPV of -9.1 percent to -19.3 percent. 
At this proposed level, the industry cash flow is estimated to decrease 
by approximately 69.3 percent to $26.5 million, compared to the base-
case value of $86.3 million in the year leading up to the proposed 
energy conservation standards.
    At TSL 5, impacts are negative under both scenarios due to the high 
conversion costs that exist at TSL 5. Although capital conversion costs 
would be $8 million lower at TSL 5 than at TSL 4 due to the removal of 
any capital costs associated with product classes 5A and 5B (despite 
higher capital costs for product class 3), product conversion costs are 
$13 million higher at TSL 5 compared to TSL 4 because a greater number 
of product lines would need to be redesigned at this level.
    TSL 6 represents max-tech for all room air conditioners. The max-
tech level corresponds to CEERs of 9.80, 10.02, 10.15, 10.35, 11.67, 
and 11.96 for product classes 5B, 8B, 5A, 8A, 1, and 3, respectively. 
DOE estimates the INPV impacts at TSL 6 to range from -$80.2 million to 
-$344.5 million, or a change in INPV of -8.4 percent to -36.0 percent. 
At this proposed level, the industry cash flow is estimated to decrease 
by 124.8 percent to -$21.4 million, compared to the base-case value of 
$86.3 million in the year leading up to the proposed energy 
conservation standards.
    At TSL 6, all products would need to be fully redesigned, resulting 
in large product and capital conversion costs of $117 million and $193 
million, respectively. These conversion costs are mostly driven by the 
high-volume product classes 1 and 3 and their associated chassis and 
heat exchanger changes.
b. Impacts on Employment
Clothes Dryer Employment Impacts
    For clothes dryers, 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 2011 to 2043. DOE used statistical data 
from the most recent U.S. Census Bureau's 2008

[[Page 22539]]

``Annual Survey of Manufacturers,'' the results of the engineering 
analysis, and interviews with manufacturers to determine the inputs 
necessary to calculate industry-wide labor expenditures and domestic 
employment levels. 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.
    In the GRIM, DOE used the labor content of each product and the 
manufacturing production costs from the engineering analysis to 
estimate the annual labor expenditures in the clothes dryers and room 
air conditioner industries. DOE used Census data and interviews with 
manufacturers to estimate the portion of the total labor expenditures 
that is attributable to domestic labor.
    The production worker estimates in this section only cover workers 
up to the line-supervisor level who are directly involved in 
fabricating and assembling a product within an Original Equipment 
Manufacturer (OEM) facility. Workers performing services that are 
closely associated with production operations, such as material handing 
with a forklift, are also included as production labor. DOE's estimates 
account only for production workers who manufacture the specific 
products covered by this rulemaking.
    The employment impacts shown in Table V-23 represent the potential 
production employment that could result following amended energy 
conservation standards. The upper end of the results in this table 
estimates the total potential increase in the number of production 
workers after amended energy conservation standards. To calculate the 
total potential increase, DOE assumed that manufacturers continue to 
produce the same scope of covered products in domestic production 
facilities and domestic production is not shifted to lower-labor-cost 
countries. Because there is a real risk of manufacturers evaluating 
sourcing decisions in response to amended energy conservation 
standards, the lower end of the range of employment results in Table V-
23 includes the estimated total number of U.S. production workers in 
the industry who could lose their jobs if all existing production were 
moved outside of the United States. While the results present a range 
of employment impacts following the compliance date of amended energy 
conservation standards, the discussion below also includes a 
qualitative discussion of the likelihood of negative employment impacts 
at the various TSLs. Finally, the employment impacts shown are 
independent of the employment impacts from the broader U.S. economy, 
which are documented in chapter 13 of the direct final rule TSD.
    Using the GRIM, DOE estimates that in the absence of amended energy 
conservation standards, there would be 4,426 domestic production 
workers involved in manufacturing residential clothes dryers in 2014. 
Using 2008 Census Bureau data and interviews with manufacturers, DOE 
estimates that approximately three-quarters of clothes dryers sold in 
the United States are manufactured domestically. Table V-23 shows the 
range of the impacts of potential amended energy conservation standards 
on U.S. production workers in the clothes dryer industry.

                         Table V-23--Potential Changes in the Total Number of Domestic Clothes Dryer Production Workers in 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Base case        1            2            3            4              5                6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of Domestic Production Workers in 2014          3,962        3,962        3,965        4,370        4,420            5,040            6,218
 (without changes in production locations)...........
Potential Changes in Domestic Production Workers in    ...........    0-(3,962)    3-(3,962)  408-(3,962)  458-(3,962)    1,078-(3,962)    2,256-(3,962)
 2014 *..............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative numbers.

    All examined TSLs show relatively minor impacts on domestic 
employment levels at the lower end of the range. In particular, the 
design options used in the engineering analysis for TSL 1 and TSL 2 
almost exclusively involve changes to standby power. These TSLs would 
not measurably impact domestic employment levels.
    At TSL 3 through TSL 5, DOE analyzed design options for the most 
common product classes that would add labor content to the final 
product. If manufacturers continue to produce these more complex 
products in house, it is likely that employment would increase in 
response to the energy conservation standards. At TSL 3 through 5, 
greater levels of domestic production employment are also likely 
because, while requiring more labor, the product changes could be made 
within existing platforms. The ability to make product changes within 
existing platforms mitigates some of the pressure to find lower labor 
costs because this decision would add disruptions with suppliers and 
add capital costs. However, TSL 6 would effectively require heat pump 
clothes dryers for all electric units. Manufacturers indicated that 
such a drastic change to existing products could force them to consider 
moving domestic production to countries with lower labor costs. Besides 
the large capital conversion costs, the much higher labor content in 
heat pump clothes dryers would also put pressure on manufacturers to 
consider a lower-labor-cost country.
Room Air Conditioner Employment Impacts
    DOE's research suggests that currently no room air conditioners are 
made domestically. All manufacturers or their domestic distributors do 
maintain offices in the United States to handle design, technical 
support, training, certification, and other requirements. As amended 
energy conservation standards for room air conditioners are 
implemented, however, DOE does not anticipate any changes in domestic 
employment levels.
c. Impacts on Manufacturing Capacity
Clothes Dryers
    At TSL 1 through TSL 5, manufacturers could maintain capacity 
levels and continue to meet market demand under amended energy 
conservation standards. While the changes required at these TSLs would 
require changes that could be made within most existing designs, TSL 6, 
which would effectively require heat pump technology, could result in 
short-term capacity constraints. Significant changes to production 
facilities would be required if amended energy conservation standards 
effectively

[[Page 22540]]

mandated heat pump clothes dryers at TSL 6. Several manufacturers 
stated that they could move all or part of their production if they 
were required to exclusively manufacture heat pump clothes dryers. 
Because of these drastic changes, a 3-year time period between the 
announcement of the final rule and the compliance date of the amended 
energy conservation standard might not be sufficient to design and 
manufacture products that have yet to be introduced in the United 
States and which would require new dryer designs from each manufacturer 
that continued to offer electric clothes dryers for the United States 
market.
Room Air Conditioners
    DOE anticipates that amended energy conservation standards would 
not significantly affect the production capacity of room air 
conditioner manufacturers. Manufacturers mentioned two issues that 
could potentially constrain capacity. One is the availability of high 
efficiency compressors, which are currently difficult to obtain. 
Because amended energy conservation standards would cause the demand 
for high efficiency compressors to increase, manufacturers worried that 
they would not be able to obtain the quantities they need to maintain 
desired production levels. DOE understands that compressor availability 
is a concern at present. DOE does not believe this shortage will 
continue when amended standards take effect in 2014 because the number 
of R-410A compressors available for the room air conditioner industry 
has already greatly expanded since the ban on R-22 took effect. Because 
there is a 3-year delay between the announcement of the final rule and 
the compliance date of the amended energy conservation standard, DOE 
believes suppliers will have sufficient time to anticipate demand and 
ramp up production of high efficiency compressors for room air 
conditioners.
    The second potential capacity constraint involves changes to 
existing chassis sizes, which could be required by amended energy 
conservation standards. Manufacturers stated that increasing chassis 
volume requires significant product development and capital 
investments, which could severely disrupt production at their 
facilities. DOE understands that increasing chassis volume causes 
substantial conversion costs, which are quantified in the GRIM. DOE 
does not believe, however, that the proposed standards would 
significantly affect production capacity. Even though chassis size 
increases require large capital and product conversion costs, this 
design option is not required across all analyzed product classes. In 
addition, manufacturers were more concerned about the capital and 
product conversion costs to make these changes than having a three year 
implementation period to do so, and DOE has accounted for these costs 
in the establishment of the room air conditioner standards. DOE 
believes that room air conditioner manufacturers will be able to 
increase chassis volumes by 2014 while maintaining production capacity 
levels and continuing to meet market demand for all room air 
conditioner standard levels.
d. Impacts on Sub-Groups of Manufacturers
    Using average cost assumptions to develop an industry cash-flow 
estimate is not 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. While DOE analyzed the impacts to small business in 
section VI.B, DOE did not identify any other subgroups for clothes 
dryers or room air conditioners for this rulemaking based on the 
results of the industry characterization.
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 rulemakings 
pertaining to appliance efficiency.
    During previous stages of this rulemaking DOE identified a number 
of requirements, in addition to amended energy conservation standards 
for clothes dryers and room air conditioners, with which manufacturers 
of these products will be required to comply. Manufacturers provided 
comment on some of these regulations during the preliminary analysis 
period, including UL 2158, which deals with fire containment in 
electric clothes dryers, and the Montreal Protocol, which banned R-22 
refrigerant in new room air conditioners. DOE summarizes and addresses 
these comments in section IV.I.3.b and provides additional details of 
the cumulative regulatory burden analysis in chapter 12 of the direct 
final rule TSD.
3. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings through 2043 attributable to 
potential standards for clothes dryers and room air conditioners, DOE 
compared the energy consumption of these products under the base case 
to their anticipated energy consumption under each TSL. As discussed in 
section IV.E, the results account for a rebound effect of 15 percent 
for room air conditioners (that is, 15 percent of the total savings 
from higher product efficiency are ``taken back'' by consumers through 
more intensive use of the product).
    Table V-24 and Table V-25 present DOE's forecasts of the national 
energy savings for each TSL for clothes dryers and room air 
conditioners, respectively. The savings were calculated using the 
approach described in section IV.G. Chapter 10 of the direct final rule 
TSD presents tables that also show the magnitude of the energy savings 
if the savings are discounted at rates of 7 and 3 percent. Discounted 
energy savings represent a policy perspective in which energy savings 
realized farther in the future are less significant than energy savings 
realized in the nearer term.

                     Table V-24--Clothes Dryers: Cumulative National Energy Savings in Quads
----------------------------------------------------------------------------------------------------------------
                                                                  Trial standard level
             Product class             -------------------------------------------------------------------------
                                              1            2            3            4          5          6
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard..............          0.000      0.038          0.347      0.347      1.268      2.923
Vented Electric Compact 120V..........          0.000      0.000          0.000      0.000      0.002      0.003

[[Page 22541]]

 
Vented Electric Compact 240V..........          0.000      0.001          0.001      0.001      0.006      0.016
Vented Gas............................          0.000      0.009          0.009      0.038      0.164      0.164
Ventless Electric Compact 240V........          0.000      0.002          0.002      0.000      0.004      0.016
Ventless Electric Combination Washer/           0.000      0.011          0.011      0.000      0.011      0.023
 Dryer................................
                                       -------------------------------------------------------------------------
    Total.............................          0.00       0.062          0.37       0.386      1.455      3.145
----------------------------------------------------------------------------------------------------------------


                 Table V-25--Room Air Conditioners: Cumulative National Energy Savings in Quads
----------------------------------------------------------------------------------------------------------------
                                                                  Trial standard level
             Product class             -------------------------------------------------------------------------
                                              1            2            3            4          5          6
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1................          0.046      0.083          0.046      0.133      0.133      0.171
Group 2--includes PC 2, 3, 4, 11......          0.051      0.115          0.161      0.161      0.327      0.445
Group 3--includes PC 5A, 9, 13........          0.001      0.001          0.000      0.001      0.000      0.008
Group 4--includes PC 5B, 10...........          0.000      0.000          0.000      0.000      0.000      0.003
Group 5--includes PC 6, 7, 8A, 12.....          0.004      0.004          0.006      0.006      0.014      0.021
Group 6--includes PC 8B, 14, 15, 16...          0.002      0.002          0.004      0.004      0.004      0.016
                                       -------------------------------------------------------------------------
    Total.............................          0.105      0.205          0.218      0.305      0.477      0.665
----------------------------------------------------------------------------------------------------------------

    DOE also performed a sensitivity to investigate the impact of 
adding the rebound effect on the NES for the six energy efficiency TSLs 
for clothes dryers in appendix 10-C of the TSD. As described in more 
detail in the TSD, at least one study estimated a potential rebound 
effective of 5 percent for clothes dryers. The NES results for this 
sensitively show a consistent, small decrease in potential energy 
savings from a standard. (Refer to section IV.E for a discussion of the 
rebound effect.)
    DOE recognizes that there may be forms of direct consumer rebound 
that have not been measured in previous studies. For example, if 
automatic termination of clothes dryer cycles leaves clothes feeling 
humid or damp, then consumers may change to longer timed drying cycles. 
DOE is addressing this type of rebound effect in updates of its clothes 
dryer test procedure which provides for a field use factor that relates 
tested clothes dryer energy use to in-field energy use. If DOE detects 
a significant rebound effect from changing characteristics of clothes 
dryers, DOE will consider such effects in updates of its test procedure 
regulations and in future amendments to the energy conservation 
standards, as appropriate.
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 clothes dryers and room air conditioners. 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. The 7-percent rate is an estimate of the 
average before-tax rate of return to private capital in the U.S. 
economy, and reflects the returns to real estate and small business 
capital as well as corporate capital. DOE used this discount rate to 
approximate the opportunity cost of capital in the private sector, 
since recent OMB analysis has found the average rate of return to 
capital to be near this rate. In addition, DOE used the 3-percent rate 
to capture the potential effects of standards on private consumption 
(for example, through higher prices for products and the purchase of 
reduced amounts of energy). This rate represents the rate at which 
society discounts future consumption flows to their present value. This 
rate can be approximated by the real rate of return on long-term 
government debt (that is, yield on Treasury notes minus annual rate of 
change in the Consumer Price Index), which has averaged about 3 percent 
on a pre-tax basis for the last 30 years.
    Table V-26 through Table V-29 show the consumer NPV results for 
each TSL DOE considered for clothes dryers and room air conditioners, 
using both a 7-percent and a 3-percent discount rate. In each case, the 
impacts cover the lifetime of products purchased in 2014-2043. See 
chapter 10 of the direct final rule TSD for more detailed NPV results.

    Table V-26--Cumulative Net Present Value of Consumer Benefits for Clothes Dryers, 3-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                  Trial standard level
             Product class             -------------------------------------------------------------------------
                                              1            2            3            4          5          6
----------------------------------------------------------------------------------------------------------------
                                                                      Billion 2009$
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard..............          0.00        0.40          2.779      2.779      2.125      0.563
Vented Electric Compact 120V..........          0.00       0.005          0.005      0.005     -0.013     -0.029
Vented Electric Compact 240V..........          0.00       0.014          0.014      0.014     -0.066      -0.12
Vented Gas............................          0.00       0.094          0.094      0.215     -1.906     -1.906
Ventless Electric Compact 240V........          0.00       0.019          0.019       0.00     -0.010     -0.036

[[Page 22542]]

 
Ventless Electric Combination Washer/           0.00       0.086          0.086       0.00      0.086       0.00
 Dryer................................
                                       -------------------------------------------------------------------------
    Total.............................          0.00       0.619          2.998      3.013      0.216     -1.528
----------------------------------------------------------------------------------------------------------------


    Table V-27--Cumulative Net Present Value of Consumer Benefits for Clothes Dryers, 7-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                  Trial standard level
             Product class             -------------------------------------------------------------------------
                                              1            2            3            4          5          6
----------------------------------------------------------------------------------------------------------------
                                                                      Billion 2009$
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard..............          0.00       0.168          1.017      1.017     -1.079     -5.025
Vented Electric Compact 120V..........          0.00       0.002          0.002      0.002     -0.011     -0.024
Vented Electric Compact 240V..........          0.00       0.006          0.006      0.006     -0.051     -0.101
Vented Gas............................          0.00       0.039          0.039      0.051     -1.474     -1.474
Ventless Electric Compact 240V........          0.00       0.008          0.008       0.00     -0.013     -0.050
Ventless Electric Combination Washer/           0.00       0.031          0.031       0.00      0.031     -0.043
 Dryer................................
                                       -------------------------------------------------------------------------
    Total.............................          0.00       0.254          1.104      1.076     -2.596     -6.716
----------------------------------------------------------------------------------------------------------------


Table V-28--Cumulative Net Present Value of Consumer Benefits for Room Air Conditioners, 3-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                  Trial standard level
             Product class             -------------------------------------------------------------------------
                                              1            2            3            4          5          6
----------------------------------------------------------------------------------------------------------------
                                                                      Billion 2009$
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1................          0.276      0.362          0.276      0.245      0.245     -1.838
Group 2--includes PC 2, 3, 4, 11......          0.427      0.902          1.162      1.162      1.121     -2.374
Group 3--includes PC 5A, 9, 13........         -0.001     -0.003          0.00      -0.003       0.00     -0.481
Group 4--includes PC 5B, 10...........         -0.002     -0.008          0.00      -0.002       0.00     -0.229
Group 5--includes PC 6, 7, 8A, 12.....          0.036      0.036          0.049      0.049      0.066     -0.379
Group 6--includes PC 8B, 14, 15, 16...          0.011      0.011          0.024      0.024      0.024     -0.314
                                       -------------------------------------------------------------------------
    Total.............................          0.747       1.30          1.511      1.474      1.456     -5.616
----------------------------------------------------------------------------------------------------------------


Table V-29--Cumulative Net Present Value of Consumer Benefits for Room Air Conditioners, 7-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
                                                                  Trial standard level
             Product class             -------------------------------------------------------------------------
                                              1            2            3            4          5          6
----------------------------------------------------------------------------------------------------------------
                                                                      Billion 2009$
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1................          0.117       0.12          0.117      -0.02      -0.02     -1.386
Group 2--includes PC 2, 3, 4, 11......          0.21       0.438          0.558      0.558      0.307     -2.084
Group 3--includes PC 5A, 9, 13........         -0.002     -0.003          0.00      -0.003       0.00     -0.317
Group 4--includes PC 5B, 10...........         -0.002     -0.006          0.00      -0.002       0.00     -0.169
Group 5--includes PC 6, 7, 8A, 12.....          0.019      0.019          0.025      0.025      0.029     -0.262
Group 6--includes PC 8B, 14, 15, 16...          0.006      0.006          0.012      0.012      0.012     -0.223
                                       -------------------------------------------------------------------------
    Total.............................          0.349      0.575          0.712       0.57      0.328     -4.441
----------------------------------------------------------------------------------------------------------------

    DOE investigated the impact of different learning rates on the NPV 
for the six energy efficiency TSLs for room air conditioners and 
clothes dryers. The NPV results presented above in Table V.26 to Table 
V.29 are based on learning rates of 38.9% for room air conditioners and 
41.6% for clothes dryers, both of which are referred to as the 
``default'' learning rates. DOE considered three learning rate 
sensitivities: (1) A ``high learning'' rate; (2) a ``low learning'' 
rate;

[[Page 22543]]

and (3) a ``no learning'' rate. In addition, for clothes dryers there 
is a fourth sensitivity: ``Clothes Dryers Only''. The ``high learning'' 
rates are 41.4-percent for room air conditioners and 42.9-percent for 
clothes dryers. The ``low learning' rates are 31.0-percent for room air 
conditioners and 33.9-percent for clothes dryers. The ``no learning'' 
rate sensitivity, which is zero-percent for all products, assumes 
constant real prices over the entire forecast period. For clothes 
dryers, ``clothes dryers only'' is based on limited set of historical 
price data specifically for clothes dryers and the learning rate is 
52.2-percent. Refer to section IV.F.1 for details on the development of 
the above learning rates.
    For room air conditioners, Table V.31 provides the annualized NPV 
of consumer benefits at a 7-percent discount rate for each of the six 
energy efficiency TSLs for the ``default'' learning rate and the three 
sensitivity cases. Table V.32 provides the same annualized NPVs but at 
a 3-percent discount rate. For clothes dryers, Table V.33 provides the 
annualized NPV of consumer benefits at a 7-percent discount rate for 
each of the six energy efficiency TSLs for the ``default'' learning 
rate and the four sensitivity cases. Table V.34 provides the same 
annualized NPVs but at a 3-percent discount rate. Included as part of 
the annualized NPV in Table V.31 through Table V.34 is the annualized 
present value of monetized benefits from CO<INF>2</INF> and 
NO<INF>X</INF> emissions reductions. Section V.B.6 below provides a 
complete description and summary of the monetized benefits from 
CO<INF>2</INF> and NO<INF>X</INF> emissions reductions. For details on 
the development of the learning rate sensitivities and the 
corresponding NPV results, see appendix 10-C of the final rule TSD.

    Table V-30--Room Air Conditioners: Annualized Net Present Value of Consumer Benefits Including Annualized
    Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions for Energy Efficiency TSLs for
                                          Products Shipped in 2014-2043
                                            [3 Percent discount rate]
----------------------------------------------------------------------------------------------------------------
        Trial standard level                                      Learning rate (LR)
----------------------------------------------------------------------------------------------------------------
                                                                                               No learning: LR =
                                      Default: LRRoomAC   Low sensitivity:  High sensitivity:  0% (constant real
                                           = 38.9%        LRRoomAC = 31.0%   LRRoomAC = 41.4%       prices)
----------------------------------------------------------------------------------------------------------------
                                                                     Billion 2009$
----------------------------------------------------------------------------------------------------------------
1...................................              0.079              0.075              0.081              0.059
2...................................              0.080              0.076              0.082              0.061
3...................................              0.092              0.088              0.093              0.072
4...................................              0.096              0.088              0.098              0.061
5...................................              0.106              0.091              0.111              0.037
6...................................            (0.241)            (0.289)            (0.226)            (0.463)
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


    Table V-31--Room Air Conditioners: Annualized Net Present Value of Consumer Benefits Including Annualized
    Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions for Energy Efficiency TSLs for
                                          Products Shipped in 2014-2043
                                            [7 Percent discount rate]
----------------------------------------------------------------------------------------------------------------
        Trial standard level                                      Learning rate (LR)
----------------------------------------------------------------------------------------------------------------
                                                                                               No learning: LR =
                                      Default: LRRoomAC   Low sensitivity:  High sensitivity:  0% (constant real
                                           = 38.9%        LRRoomAC = 31.0%   LRRoomAC = 41.4%       prices)
----------------------------------------------------------------------------------------------------------------
                                                                     Billion 2009$
----------------------------------------------------------------------------------------------------------------
1...................................              0.059              0.055              0.060              0.041
2...................................              0.060              0.057              0.061              0.043
3...................................              0.072              0.068              0.073              0.056
4...................................              0.066              0.060              0.069              0.037
5...................................              0.058              0.045              0.062            (0.000)
6...................................            (0.313)            (0.355)            (0.300)            (0.502)
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


[[Page 22544]]


 Table V-32--Clothes Dryer: Annualized Net Present Value of Consumer Benefits Including Annualized Present Value of Monetized Benefits From CO2 and NOX
                                    Emissions Reductions for Energy Efficiency TSLs for Products Shipped in 2014-2043
                                                                [3 Percent discount rate]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                   Trial standard level                                                          Learning rate (LR)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    No learning: LR =     Sensitivity
                                                            Default: LRCD =    Low sensitivity:  High sensitivity:  0% (constant real   (Clothes dryers
                                                                 41.6%           LRCD = 33.9%       LRCD = 42.9%         prices)       only): LR = 52.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................              0.001              0.001              0.001              0.001              0.001
2........................................................              0.036              0.036              0.036              0.035              0.036
3........................................................              0.178              0.173              0.179              0.158              0.183
4........................................................              0.180              0.175              0.181              0.156              0.186
5........................................................              0.110              0.033              0.121            (0.220)              0.199
6........................................................              0.185              0.018              0.209            (0.531)              0.378
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


 Table V-33--Clothes Dryer: Annualized Net Present Value of Consumer Benefits Including Annualized Present Value of Monetized Benefits From CO2 and NOX
                                    Emissions Reductions for Energy Efficiency TSLs for Products Shipped in 2014-2043
                                                                [7 Percent discount rate]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                   Trial standard level                                                          Learning rate (LR)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                    No Learning: LR =     Sensitivity
                                                            Default: LRCD =    Low Sensitivity:  High Sensitivity:  0% (constant real   (Clothes Dryers
                                                                 41.6%           LRCD = 33.9%       LRCD = 42.9%         prices)       Only): LR = 52.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................              0.001              0.001              0.001              0.001              0.001
2........................................................              0.025              0.024              0.025              0.024              0.025
3........................................................              0.114              0.110              0.114              0.098              0.118
4........................................................              0.113              0.108              0.113              0.094              0.118
5........................................................            (0.111)            (0.176)            (0.103)            (0.375)            (0.041)
6........................................................            (0.282)            (0.421)            (0.263)            (0.853)            (0.130)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.

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 clothes dryers and room air 
conditioners to reduce energy bills for consumers of these 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.J, to estimate these effects DOE used an input/output model of the 
U.S. economy. Table V-34 presents the estimated net indirect employment 
impacts in 2020 and 2043 for the TSLs that DOE considered in this 
rulemaking. Chapter 13 of the direct final rule TSD presents more 
detailed results.

          Table V-34--Net Increase in Jobs From Indirect Employment Effects Under Clothes Dryer and Room Air Conditioner Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Thousands
                                                         -----------------------------------------------------------------------------------------------
                                                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residential Clothes Dryers:
    2020................................................            0.00            0.00            0.41            0.36           -1.37           -3.16
    2043................................................            0.01            0.01            1.82            1.75            4.25            9.30
Room Air Conditioners:
    2020................................................            0.90            0.88            0.97            1.34            2.04            3.22
    2043................................................            0.74            0.73            0.74            1.16            1.94            3.07
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The input/output model suggests that today's proposed standards are 
likely to increase the net demand for labor in the economy. The 
projected gains are very small, however, relative to total national 
employment (currently approximately 120 million). Moreover, neither the 
BLS data nor the input/output model DOE

[[Page 22545]]

uses includes the quality or wage level of the jobs.
4. Impact on Utility or Performance of Products
    As presented in section III.D.1.d of this notice, DOE concluded 
that none of the TSLs considered in this notice would reduce the 
utility or performance of the clothes dryers or room air conditioners 
under consideration in this rulemaking. DOE also notes that 
manufacturers of these products currently offer clothes dryers and room 
air conditioners 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 published an NOPR containing energy conservation standards 
identical to those set forth in today's direct final rule and 
transmitted a copy of today's direct final rule 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 
rule in determining whether to proceed with the direct final rule. 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
    An improvement in the energy efficiency of the products subject to 
today's rule is likely to improve the security of the nation's energy 
system by reducing overall demand for energy. Reduced electricity 
demand may also improve the reliability of the electricity system. As a 
measure of this reduced demand, Table V-35 presents the estimated 
reduction in electricity generating capacity in 2043 for the TSLs that 
DOE considered in this rulemaking.

            Table V-35--Reduction in Electric Generating Capacity in 2043 Under Clothes Dryer and Room Air Conditioner Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Gigawatts
                                                         -----------------------------------------------------------------------------------------------
Clothes Dryers..........................................           0.002           0.060           0.358           0.345            1.27            2.27
Room Air Conditioners...................................           0.348           0.429           0.436           0.632            1.01            1.46
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Energy savings from amended standards for clothes dryers and room 
air conditioners are expected to produce environmental benefits in the 
form of reduced emissions of air pollutants and greenhouse gases 
associated with electricity production. Table V-36 provides DOE's 
estimate of cumulative CO<INF>2</INF>, NO<INF>X</INF>, and Hg emissions 
reductions that would be expected to result from the TSLs considered in 
this rulemaking. In the environmental assessment (chapter 15 of the 
direct final rule TSD), DOE reports annual CO<INF>2</INF>, 
NO<INF>X</INF>, and Hg emissions reductions for each TSL.
    As discussed in section IV.L, DOE has not reported SO<INF>2</INF> 
emissions reductions from power plants because there is uncertainty 
about the effect of energy conservation standards on the overall level 
of SO<INF>2</INF> emissions in the United States due to SO<INF>2</INF> 
emissions caps. DOE also did not include NO<INF>X</INF> emissions 
reduction from power plants in States subject to CAIR because an energy 
conservation standard would not affect the overall level of 
NO<INF>X</INF> emissions in those States due to the emissions caps 
mandated by CAIR.

                       Table V-36--Emissions Reduction Estimated for Clothes Dryer and Room Air Conditioner Trial Standard Levels
                                                           [Cumulative for 2014 through 2043]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               TSL 1           TSL 2           TSL 3           TSL 4           TSL 5           TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Clothes Dryers:
    CO2 million metric tons.............................           0.119           2.99           17.75           18.67           70.47          186.6
    NOX thousand tons...................................           0.097           2.41           14.26           15.14           57.26          151.3
    Hg tons.............................................           0.000           0.009           0.053           0.051           0.188           0.569
Room Air Conditioners:
    CO2 million metric tons.............................           9.83           11.88           12.49           17.4            26.89           37.68
    NOX thousand tons...................................           8.02            9.69           10.2            14.2            21.91           30.69
    Hg tons.............................................           0.012           0.015           0.017           0.022           0.032           0.044
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE also estimated monetary benefits likely to result from the 
reduced emissions of CO<INF>2</INF> and NO<INF>X</INF> that DOE 
estimated for each of the TSLs considered for clothes dryers and room 
air conditioners. In order to make this calculation similar to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
2014-2043. Thus, the emissions reductions extend past 2043.
    As discussed in section IV.M, DOE used values for the SCC developed 
by an interagency process. The four values for CO<INF>2</INF> emissions 
reductions resulting from that process (expressed in 2009$) are $4.9/
ton (the average value from a distribution that uses a 5-percent 
discount rate), $22.1/ton (the average value from a distribution that 
uses a 3-percent discount rate), $36.3/ton (the average value from a 
distribution that uses a 2.5-percent discount rate), and $67.1/ton (the 
95th-percentile value from a distribution that uses a 3-percent

[[Page 22546]]

discount rate). These values correspond to the value of emission 
reductions in 2010; the values for later years are higher due to 
increasing damages as the magnitude of climate change increases. 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. Table V-37 and Table V-
38 present the global values of CO<INF>2</INF> emissions reductions at 
each TSL. DOE calculated domestic values as a range from 7 percent to 
23 percent of the global values, and these results are presented in 
Table V-39 and Table V-40.

  Table V-37--Clothes Dryers: Estimates of Global Present Value of CO2 Emissions Reduction Under Trial Standard
                                                     Levels
----------------------------------------------------------------------------------------------------------------
                                                                     Million 2009$
                                     ---------------------------------------------------------------------------
                 TSL                  5% discount rate,  3% discount rate,    2.5% discount    3% discount rate,
                                          average *          average *       rate, average *   95th percentile *
----------------------------------------------------------------------------------------------------------------
1...................................                  1                  3                  5                 10
2...................................                 15                 79                134                239
3...................................                 88                465                793               1417
4...................................                 93                489                834               1490
5...................................                351               1848               3148               5626
6...................................                929               4894               8339              14902
----------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn
  from a different part of the distribution. Values presented in the table incorporate the escalation of the SCC
  over time.


   Table V-38--Room Air Conditioners: Estimates of Global Present Value of CO2 Emissions Reduction Under Trial
                                                 Standard Levels
----------------------------------------------------------------------------------------------------------------
                                                                     Million 2009$
                                     ---------------------------------------------------------------------------
                 TSL                  5% discount rate,  3% discount rate,    2.5% discount    3% discount rate,
                                          average *          average *       rate, average *   95th percentile *
----------------------------------------------------------------------------------------------------------------
1...................................                 43                212                357                648
2...................................                 52                259                436                790
3...................................                 55                271                455                826
4...................................                 77                382                642               1164
5...................................                118                591                996               1803
6...................................                166                833               1404               2541
----------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn
  from a different part of the distribution. Values presented in the table incorporate the escalation of the SCC
  over time.


                 Table V-39--Clothes Dryers: Estimates of Domestic Present Value of CO2 Emissions Reduction Under Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Million 2009$ *
                                     -------------------------------------------------------------------------------------------------------------------
                 TSL                   5% discount rate, average    3% discount rate, average   2.5% discount rate, average     3% discount rate, 95th
                                                   **                           **                           **                     percentile **
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  0.042 to 0.14..............  0.22 to 0.72...............  0.37 to 1.22...............  0.67 to 2.19.
2...................................  1.04 to 3.43...............  5.50 to 18.1...............  9.37 to 30.8...............  16.7 to 55.0.
3...................................  6.19 to 20.3...............  32.6 to 107................  55.5 to 182................  99.2 to 326.
4...................................  6.51 to 21.4...............  34.3 to 113................  58.4 to 192................  104 to 343.
5...................................  24.6 to 80.7...............  129 to 425.................  220 to 724.................  394 to 1294.
6...................................  65.1 to 214................  343 to 1126................  584 to 1918................  1043 to 3428.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Domestic values are presented as a range between 7 percent and 23 percent of the global values.
** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn from a different part of the
  distribution. Values presented in the table incorporate the escalation of the SCC over time.


              Table V-40--Room Air Conditioners: Estimates of Domestic Present Value of CO2 Emissions Reduction Under Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Million 2009$ *
                                     -------------------------------------------------------------------------------------------------------------------
                 TSL                   5% discount rate, average    3% discount rate, average   2.5% discount rate, average     3% discount rate, 95th
                                                   **                           **                           **                     percentile **
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  3.00 to 9.85...............  14.9 to 48.8...............  25.0 to 82.1...............  45.4 to 149.
2...................................  3.64 to 12.0...............  18.1 to 59.6...............  30.5 to 100................  55.3 to 182.
3...................................  3.83 to 12.6...............  18.9 to 62.3...............  31.9 to 105................  57.8 to 190.
4...................................  5.36 to 17.6...............  26.7 to 87.8...............  45.0 to 148................  81.5 to 268.
5...................................  8.29 to 27.2...............  41.4 to 136................  69.7 to 229................  126 to 415.

[[Page 22547]]

 
6...................................  11.6 to 38.3...............  58.3 to 192................  98.3 to 323................  178 to 584.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Domestic values are presented as a range between 7 percent and 23 percent of the global values.
** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn from a different part of the
  distribution. Values presented in the table incorporate the escalation of the SCC over time.

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO<INF>2</INF> 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 in 
this rulemaking on reducing CO<INF>2</INF> emissions is subject to 
change. DOE, together with other Federal agencies, will continue to 
review various methodologies for estimating the monetary value of 
reductions in CO<INF>2</INF> 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 final rule the 
most recent values and analyses resulting from the ongoing interagency 
review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NO<INF>X</INF> emissions reductions 
anticipated to result from amended standards for clothes dryers and 
room air conditioners. The dollar-per-ton values that DOE used are 
discussed in section IV.M. Table V-41 and Table V-42 present the 
cumulative present values for each TSL calculated using seven-percent 
and three-percent discount rates.

 Table V-41--Clothes Dryers: Estimates of Present Value of NOX Emissions
                  Reduction Under Trial Standard Levels
------------------------------------------------------------------------
                                3% discount rate      7% discount rate
             TSL                  Million 2009$         Million 2009$
------------------------------------------------------------------------
1...........................  0.031 to 0.314......  0.013 to 0.136.
2...........................  0.759 to 7.8........  0.328 to 3.37.
3...........................  4.49 to 46.2........  1.94 to 19.98.
4...........................  4.77 to 49.02.......  2.06 to 21.2.
5...........................  18.0 to 185.........  7.8 to 80.2.
6...........................  47.6 to 490.........  20.6 to 212.
------------------------------------------------------------------------


  Table V-42--Room Air Conditioners: Estimates of Present Value of NOX
             Emissions Reduction Under Trial Standard Levels
------------------------------------------------------------------------
                                3% discount rate      7% discount rate
             TSL                  Million 2009$         Million 2009$
------------------------------------------------------------------------
1...........................  2.34 to 24.0........  1.25 to 12.9.
2...........................  2.83 to 29.1........  1.50 to 15.4.
3...........................  2.99 to 30.7........  1.61 to 16.6.
4...........................  4.16 to 42.7........  2.2 to 22.6.
5...........................  6.40 to 65.8........  3.35 to 34.4.
6...........................  8.96 to 92.1........  4.64 to 47.7.
------------------------------------------------------------------------

    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the consumer 
savings calculated for each TSL considered in this rulemaking. Table V-
43 shows an example of the calculation of the combined NPV including 
benefits from emissions reductions for the case of TSL 4 for clothes 
dryers. Table V-44 through Table V-47 present the NPV values that 
result from adding the estimates of the potential economic benefits 
resulting from reduced CO<INF>2</INF> and NO<INF>X</INF> emissions in 
each of four valuation scenarios to the NPV of consumer savings 
calculated for each TSL considered in this rulemaking, at both a 7-
percent and 3-percent discount rate. The CO<INF>2</INF> values used in 
the columns of each table correspond to the four scenarios for the 
valuation of CO<INF>2</INF> emission reductions presented in section 
IV.M.

[[Page 22548]]



   Table V-43--Adding Net Present Value of Consumer Savings to Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions at TSL
                          4 for Clothes Dryers
------------------------------------------------------------------------
                                      Present value      Discount rate
             Category                 billion 2009$        (percent)
------------------------------------------------------------------------
Benefits:
    Operating Cost Savings.......               1.726                 7%
                                                4.099                 3%
    CO2 Reduction Monetized Value               0.093                  5
     (at $4.9/metric ton) *......
    CO2 Reduction Monetized Value               0.489                  3
     (at $22.1/metric ton) *.....
    CO2 Reduction Monetized Value               0.834                2.5
     (at $36.3/metric ton) *.....
    CO2 Reduction Monetized Value               1.49                   3
     (at $67.1/metric ton) *.....
    NOX Reduction Monetized Value               0.012                  7
     (at $2,519/ton) *...........
                                                0.027                  3
    Total Monetary Benefits **...               2.227                  7
                                                4.615                  3
Costs:
    Total Incremental Installed                 0.65                   7
     Costs.......................
                                                1.086                  3
Net Benefits/Costs:
    Including CO2 and NOX**......               1.58                   7
                                                3.53                   3
------------------------------------------------------------------------
* These values represent global values (in 2009$) of the SCC in 2010
  under several scenarios. The values of $4.9, $22.1, and $36.3 per ton
  are the averages of SCC distributions calculated using 5-percent, 3-
  percent, and 2.5-percent discount rates, respectively. The value of
  $67.1 per ton represents the 95th percentile of the SCC distribution
  calculated using a 3-percent discount rate. See section IV.M for
  details. The value for NOX (in 2009$) is the average of the low and
  high values used in DOE's analysis.
** Total Monetary Benefits for both the 3-percent and 7-percent cases
  utilize the central estimate of social cost of CO2 emissions
  calculated at a 3% discount rate, which is equal to $22.1/ton in 2010
  (in 2009$).


 Table V-44--Results of Adding Net Present Value of Consumer Savings (at 7-Percent Discount Rate) to Net Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Clothes Dryers
----------------------------------------------------------------------------------------------------------------
                                                     Consumer NPV at 7% discount rate added with:
                                     ---------------------------------------------------------------------------
                                         SCC Value of       SCC Value of       SCC Value of       SCC Value of
                 TSL                   $4.9/metric ton    $22.1/metric ton   $36.3/metric ton   $67.1/metric ton
                                         CO2* and Low     CO2* and Medium    CO2* and Medium     CO2* and High
                                       Value for NOX**    Value for NOX**    Value for NOX**    Value for NOX**
                                        billion 2009$      billion 2009$      billion 2009$      billion 2009$
----------------------------------------------------------------------------------------------------------------
1...................................            0.00061            0.00320            0.00540            0.00965
2...................................            0.0152             0.0804             0.136              0.243
3...................................            0.0903             0.476              0.804              1.437
4...................................            0.0950             0.501              0.846              1.512
5...................................            0.359              1.892              3.192              5.707
6...................................            0.950              5.010              8.455             15.114
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
  scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
  emissions. High Value corresponds to $4,591 per ton of NOX emissions.


 Table V-45--Results of Adding Net Present Value of Consumer Savings (at 3-Percent Discount Rate) to Net Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Clothes Dryers
----------------------------------------------------------------------------------------------------------------
                                                     Consumer NPV at 3% discount rate added with:
                                     ---------------------------------------------------------------------------
                                         SCC Value of       SCC Value of       SCC Value of       SCC Value of
                 TSL                   $4.9/metric ton    $22.1/metric ton   $36.3/metric ton   $67.1/metric ton
                                         CO2* and Low     CO2* and Medium    CO2* and Medium     CO2* and High
                                       Value for NOX**    Value for NOX**    Value for NOX**    Value for NOX**
                                        billion 2009$      billion 2009$      billion 2009$      billion 2009$
----------------------------------------------------------------------------------------------------------------
1...................................            0.00062            0.00330            0.00550            0.00983
2...................................            0.0157             0.0829             0.138              0.247
3...................................            0.0929             0.491              0.818              1.463
4...................................            0.0977             0.516              0.861              1.539
5...................................            0.369              1.949              3.250              5.812
6...................................            0.977              5.163              8.608             15.392
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
  scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
  emissions. High Value corresponds to $4,591 per ton of NOX emissions.


[[Page 22549]]


 Table V-46--Results of Adding Net Present Value of Consumer Savings (at 7-Percent Discount Rate) to Net Present
   Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Room Air
                                                  Conditioners
----------------------------------------------------------------------------------------------------------------
                                                     Consumer NPV at 7% discount rate added with:
                                    ----------------------------------------------------------------------------
                                     SCC Value of  $4.9/    SCC Value of       SCC Value of       SCC Value of
                TSL                   metric ton  CO2*    $22.1/metric ton   $36.3/metric ton   $67.1/metric ton
                                     and Low  Value for   CO2* and Medium    CO2* and Medium     CO2* and High
                                       NOX**  billion     Value for NOX**    Value for NOX**    Value for NOX**
                                            2009$          billion 2009$      billion 2009$      billion 2009$
----------------------------------------------------------------------------------------------------------------
1..................................              0.044               0.219              0.364              0.661
2..................................              0.054               0.267              0.444              0.805
3..................................              0.0563              0.280              0.464              0.843
4..................................              0.0788              0.394              0.655              1.187
5..................................              0.122               0.610              1.015              1.838
6..................................              0.171               0.859              1.430              2.588
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
  scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
  emissions. High Value corresponds to $4,591 per ton of NOX emissions.


 Table V-47--Results of Adding Net Present Value of Consumer Savings (at 3-Percent Discount Rate) to Net Present
   Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Room Air
                                                  Conditioners
----------------------------------------------------------------------------------------------------------------
                                                     Consumer NPV at 3% discount rate added with:
                                    ----------------------------------------------------------------------------
                                     SCC Value of  $4.9/    SCC Value of       SCC Value of       SCC Value of
                TSL                   metric ton  CO2*    $22.1/metric ton   $36.3/metric ton   $67.1/metric ton
                                     and Low  Value for    CO2*and Medium    CO2* and Medium     CO2* and High
                                       NOX**  billion     Value for NOX**    Value for NOX**    Value for NOX**
                                            2009$          billion 2009$      billion 2009$      billion 2009$
----------------------------------------------------------------------------------------------------------------
1..................................              0.045               0.226              0.370              0.672
2..................................              0.055               0.275              0.452              0.819
3..................................              0.0576              0.288              0.472              0.857
4..................................              0.0807              0.405              0.666              1.207
5..................................              0.125               0.627              1.032              1.869
6..................................              0.175               0.884              1.454              2.633
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
  scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
  emissions. High Value corresponds to $4,591 per ton of NOX emissions.

    Although adding the value of consumer 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. consumer monetary savings that occur as a result of market 
transactions, while the value of CO<INF>2</INF> reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the 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 2014-2043. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one ton of carbon 
dioxide in each year. These impacts continue well beyond 2100.
7. 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))) In 
developing the direct final rule, DOE has also considered the Joint 
Petition submitted to DOE. DOE recognizes the value of consensus 
agreements submitted by parties in accordance with 42 U.S.C. 6295(p)(4) 
and has weighed the value of such consensus in establishing the 
standards set forth in today's final rule. DOE has encouraged the 
submission of consensus agreements as a way to get diverse stakeholders 
together, to develop an independent and probative analysis useful in 
DOE standard setting, and to expedite the rulemaking process. DOE also 
believes that standard levels recommended in the consensus agreement 
may increase the likelihood for regulatory compliance, while decreasing 
the risk of litigation.

C. Proposed Standards

    When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered product shall be designed to achieve the maximum improvement in 
energy efficiency that DOE determines is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining 
whether a standard is economically justified, DOE must determine 
whether the benefits of the standard exceed its burdens to the greatest 
extent practicable, in light of the seven statutory factors discussed 
previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard 
must also ``result in significant conservation of energy.'' (42 U.S.C. 
6295(o)(3)(B))
    The Department considered the impacts of standards at each trial

[[Page 22550]]

standard level, beginning with maximum technologically feasible level, 
to determine whether that level was economically justified. Where the 
max-tech level was not economically justified, DOE then 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 burdens of each 
trial standard level, DOE has included tables that 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. These 
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 V.B.1 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 vs. 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 its 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: (1) If consumers forego a purchase 
of a product in the standards case, this decreases sales for product 
manufacturers and the cost to manufacturers is included in the MIA, and 
(2) 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 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 (Reiss and White 2004).
    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 seeks 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.
1. Benefits and Burdens of TSLs Considered for Clothes Dryers
    Table V-48 and Table V-49 present a summary of the quantitative 
impacts estimated for each TSL for clothes dryers. The efficiency 
levels contained in each TSL are described in section V.A.

                                Table V-48--Summary of Results for Clothes Dryer Trial Standard Levels: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Category                   TSL 1                TSL 2                TSL 3                TSL 4               TSL 5               TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings        0.00...............  0.062..............  0.37...............  0.39..............  1.45..............  3.14.
 (quads).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NPV of Consumer Benefits (2009$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate.............  0.00...............  0.62...............  3.00...............  3.01..............  0.22..............  (1.53).
7% discount rate.............  0.01...............  0.25...............  1.10...............  1.08..............  (2.60)............  (6.72).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....  0.119..............  2.99...............  17.75..............  18.67.............  70.47.............  186.6.
NOX (thousand tons)..........  0.097..............  2.41...............  14.26..............  15.14.............  57.26.............  151.3.
Hg (ton).....................  0.000..............  0.009..............  0.053..............  0.051.............  0.188.............  0.569.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Value of Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2009$ million) *........  1 to 10............  15 to 239..........  88 to 1417.........  93 to 1490........  351 to 5626.......  929 to 14902.
NOX--3% discount rate (2009    0.031 to 0.314.....  0.759 to 7.8.......  4.49 to 46.2.......  4.77 to 49.0......  18.0 to 185.......  47.6 to 490.
 million).
NOX--7% discount rate (2009$   0.013 to 0.136.....  0.328 to 3.37......  1.94 to 20.0.......  2.06 to 21.2......  7.8 to 80.2.......  20.6 to 212.
 million).
Generation Capacity Reduction  0.002..............  0.060..............  0.358..............  0.345.............  1.27..............  2.27.
 (GW)\**\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Potential Change in      0.00 to (3.96).....  0.00 to (3.96).....  0.41 to (3.96).....  0.46 to (3.96)....  1.08 to (3.96)....  2.26 to (3.96).
 Domestic Production Workers
 in 2014 (thousands).

[[Page 22551]]

 
Indirect Domestic Jobs         0.01...............  0.01...............  1.82...............  1.75..............  4.25..............  9.30.
 (thousands)\**\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
** Changes in 2043.


                        Table V-49--Summary of Results for Clothes Dryer Trial Standard Levels: Consumer and Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Category                   TSL 1                TSL 2                TSL 3                TSL 4               TSL 5               TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million).  (2.5) to (2.5).....  (3.6) to (4.9).....  (41.1) to (55.5)...  (64.5) to (80.6)..  (176.5) to (397.4)  (303.9) to
                                                                                                                                       (730.0).
Industry NPV (% change)......  (0.3) to (0.3).....  (0.4) to (0.5).....  (4.1) to (5.5).....  (6.4) to (8.0)....  (17.6) to (39.6)..  (30.3) to (72.7).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Consumer Mean LCC Savings * (2009$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............  $0.................  $2.................  $14................  $14...............  ($30).............  ($146).
Compact 120V.................  $0.................  $14................  $14................  $14...............  ($99).............  ($264).
Compact 240V.................  $0.................  $8.................  $8.................  $8................  ($99).............  ($246).
Gas..........................  $0.................  $2.................  $2.................  $2................  ($100)............  ($100).
Ventless 240V................  $0.................  $20................  $20................  $0................  ($42).............  ($177).
Ventless Combination Washer/   $0.................  $73................  $73................  $0................  $73...............  ($166).
 Dryer.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Consumer Median PBP (years) **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............  3.9................  0.2................  5.3................  5.3...............  19.1..............  22.1.
Compact 120V.................  n/a................  0.9................  0.9................  0.9...............  36.1..............  40.1.
Compact 240V.................  0.0................  0.9................  0.9................  0.9...............  45.1..............  38.2.
Gas..........................  2.2................  0.5................  0.5................  11.7..............  49.5..............  49.5.
Ventless 240V................  n/a................  0.9................  0.9................  n/a...............  25.3..............  26.9.
Ventless Combination Washer/   n/a................  5.3................  5.3................  n/a...............  5.3...............  22.4.
 Dryer.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Distribution of Consumer LCC Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard:
    Net Cost (%).............  1%.................  0%.................  19%................  19%...............  75%...............  81%.
    No Impact (%)............  98%................  79%................  25%................  25%...............  1%................  0%.
    Net Benefit (%)..........  2%.................  21%................  56%................  56%...............  24%...............  19%.
Compact 120V:
    Net Cost (%).............  0%.................  4%.................  4%.................  4%................  95%...............  95%.
    No Impact (%)............  100%...............  0%.................  0%.................  0%................  0%................  0%.
    Net Benefit (%)..........  0%.................  96%................  96%................  96%...............  5%................  5%.
Compact 240V:
    Net Cost (%).............  0%.................  2%.................  2%.................  2%................  93%...............  95%.
    No Impact (%)............  100%...............  41%................  41%................  41%...............  4%................  0%.
    Net Benefit (%)..........  0%.................  56%................  56%................  56%...............  3%................  5%.
Gas:                           ...................  ...................  ...................  ..................  ..................  ..................
    Net Cost (%).............  1%.................  0%.................  0%.................  32%...............  95%...............  95%.
    No Impact (%)............  93%................  85%................  85%................  42%...............  1%................  1%.
    Net Benefit (%)..........  7%.................  15%................  15%................  26%...............  4%................  4%.
Ventless 240V:
    Net Cost (%).............  0%.................  0%.................  0%.................  0%................  92%...............  88%.
    No Impact (%)............  100%...............  0%.................  0%.................  100%..............  0%................  0%.
    Net Benefit (%)..........  0%.................  100%...............  100%...............  0%................  8%................  12%.
Ventless Combination Washer/
 Dryer:
Net Cost (%).................  0%.................  21%................  21%................  0%................  21%...............  82%.
No Impact (%)................  100%...............  0%.................  0%.................  100%..............  0%................  0%.
Net Benefit (%)..............  0%.................  79%................  79%................  0%................  79%...............  18%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* For LCCs, a negative value means an increase in LCC by the amount indicated.
** In some cases the standard level is the same as the baseline efficiency level, so no consumers are impacted and therefore calculation of a payback
  period is not applicable.

    DOE first considered TSL 6, which represents the max-tech 
efficiency levels. TSL 6 would save 3.14 quads of energy, an amount DOE 
considers significant. Under TSL 6, the NPV of consumer benefit would 
be -$6.72 billion, using a discount rate of 7 percent, and -$1.53 
billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 6 are 186.6 Mt of 
CO<INF>2</INF>, 151.3

[[Page 22552]]

thousand tons of NO<INF>X</INF>, and 0.569 ton of Hg. The estimated 
monetary value of the CO<INF>2</INF> emissions reductions at TSL 6 
ranges from $929 million to $14,902 million. Total generating capacity 
in 2043 is estimated to decrease by 2.27 GW under TSL 6.
    At TSL 6, the average LCC impact is a cost (LCC increase) of $146 
for electric standard clothes dryers, a cost of $264 for 120V compact 
clothes dryers, a cost of $246 for 240V compact clothes dryers, a cost 
of $100 for gas clothes dryers, a cost of $177 for ventless 240V 
clothes dryers, and a cost of $166 for combination washer/dryers. The 
median payback period is 22.1 years for electric standard clothes 
dryers, 40.1 years for 120Vcompact clothes dryers, 38.2 years for 240V 
compact clothes dryers, 49.5 years for gas clothes dryers, 26.9 years 
for ventless 240V clothes dryers, and 22.4 years for combination 
washer/dryers. The fraction of consumers experiencing an LCC benefit is 
19 percent for electric standard clothes dryers, 5 percent for 120V 
compact clothes dryers, 5 percent for 240V compact clothes dryers, 4 
percent for gas clothes dryers, 12 percent for ventless 240V clothes 
dryers, and 18 percent for combination washer/dryers. The fraction of 
consumers experiencing an LCC cost is 81 percent for electric standard 
clothes dryers, 95 percent for 120Vcompact clothes dryers, 95 percent 
for 240V compact clothes dryers, 95 percent for gas clothes dryers, 88 
percent for ventless 240V clothes dryers, and 82 percent for 
combination washer/dryers.
    At TSL 6, the projected change in INPV ranges from a decrease of 
$303.9 million to a decrease of $730.0 million. TSL 6 would effectively 
require heat pump clothes dryers for all electric clothes dryer product 
classes. Changing all electric models to use heat pump technology would 
be extremely disruptive to current manufacturing facilities and would 
require substantial product and capital conversion costs. In addition, 
the large cost increases would greatly harm manufacturer profitability 
if they were unable to earn additional operating profit on these 
additional costs. At TSL 6, DOE recognizes the risk of very large 
negative impacts if manufacturers' expectations concerning reduced 
profit margins and large conversion costs are realized. If the high end 
of the range of impacts is reached as DOE expects, TSL 6 could result 
in a net loss of 72.6 percent in INPV to clothes dryer manufacturers.
    DOE concludes that at TSL 6 for residential clothes dryers, the 
benefits of energy savings, generating capacity reductions, emission 
reductions, and the estimated monetary value of the CO<INF>2</INF> 
emissions reductions would be outweighed by the negative NPV of 
consumer benefits, the economic burden on a significant fraction of 
consumers due to the large increases in product cost, and the 
conversion costs and profit margin impacts that could result in a very 
large reduction in INPV for the manufacturers. Consequently, the 
Secretary has concluded that TSL 6 is not economically justified.
    DOE next considered TSL 5. TSL 5 would save 1.45 quads of energy, 
an amount DOE considers significant. Under TSL 5, the NPV of consumer 
benefit would be -$2.60 billion, using a discount rate of 7 percent, 
and $0.22 billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 70.47 Mt of 
CO<INF>2</INF>, 57.26 thousand tons of NO<INF>X</INF>, and 0.188 tons 
of Hg. The estimated monetary value of the CO<INF>2</INF> emissions 
reductions at TSL 5 ranges from $351 million to $5,626 million. Total 
generating capacity in 2043 is estimated to decrease by 1.27 GW under 
TSL 5.
    At TSL 5, the average LCC impact is a cost (LCC increase) of $30 
for electric standard clothes dryers, a cost of $99 for 120Vcompact 
clothes dryers, a cost of $99 for 240V compact clothes dryers, a cost 
of $100 for gas clothes dryers, a cost of $42 for ventless 240V clothes 
dryers, and a savings of $73 for combination washer/dryers. The median 
payback period is 19.1 years for electric standard clothes dryers, 36.1 
years for 120Vcompact clothes dryers, 45.1 years for 240V compact 
clothes dryers, 49.5 years for gas clothes dryers, 25.3 years for 
ventless 240V clothes dryers, and 5.3 years for combination washer/
dryers. The fraction of consumers experiencing an LCC benefit is 24 
percent for electric standard clothes dryers, 5 percent for 120Vcompact 
clothes dryers, 3 percent for 240V compact clothes dryers, 4 percent 
for gas clothes dryers, 8 percent for ventless 240V clothes dryers, and 
79 percent for combination washer/dryers. The fraction of consumers 
experiencing an LCC cost is 75 percent for electric standard clothes 
dryers, 95 percent for 120Vcompact clothes dryers, 93 percent for 240V 
compact clothes dryers, 95 percent for gas clothes dryers, 92 percent 
for ventless 240V clothes dryers, and 21 percent for combination 
washer/dryers.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$176.5 million to a decrease of $397.4 million. While most changes at 
TSL 5 could be made within existing product design, redesigning units 
to the most efficient technologies on the market today would take 
considerable capital and product conversion costs. At TSL 5, DOE 
recognizes the risk of very large negative impacts if manufacturers are 
not able to earn additional operating profit from the additional 
production costs to reach TSL 5. If the high end of the range of 
impacts is reached as DOE expects, TSL 5 could result in a net loss of 
39.6 percent in INPV to clothes dryer manufacturers.
    The Secretary concludes that at TSL 5 for residential clothes 
dryers, the benefits of energy savings, generating capacity reductions, 
emission reductions, and the estimated monetary value of the 
CO<INF>2</INF> emissions reductions would be outweighed by the negative 
NPV of consumer benefits, the economic burden on a significant fraction 
of consumers due to the large increases in product cost, and the 
conversion costs and profit margin impacts that could result in a large 
reduction in INPV for the manufacturers. Consequently, the Secretary 
has concluded that TSL 5 is not economically justified.
    DOE then considered TSL 4. TSL 4 would save 0.39 quads of energy, 
an amount DOE considers significant. Under TSL 4, the NPV of consumer 
benefit would be $1.08 billion, using a discount rate of 7 percent, and 
$3.01 billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 18.67 Mt of 
CO<INF>2</INF>, 15.14 thousand tons of NO<INF>X</INF>, and 0.051 ton of 
Hg. The estimated monetary value of the CO<INF>2</INF> emissions 
reductions at TSL 4 ranges from $93 million to $1,490 million. Total 
generating capacity in 2043 is estimated to decrease by 0.345 GW under 
TSL 4.
    At TSL 4, DOE projects that the average LCC impact is a savings 
(LCC decrease) of $14 for electric standard clothes dryers, a savings 
of $14 for 120V compact clothes dryers, a savings of $8 for 240V 
compact clothes dryers, a savings of $2 for gas clothes dryers, and no 
change for ventless 240V clothes dryers and combination washer/dryers. 
The median payback period is 5.3 years for electric standard clothes 
dryers, 0.9 years for 120V compact clothes dryers, 0.9 years for 240V 
compact clothes dryers, 11.7 years for gas clothes dryers, and is not 
applicable for ventless 240V clothes dryers and combination washer/
dryers.\64\ The fraction of consumers experiencing an LCC benefit is 56 
percent for electric standard clothes dryers, 96 percent for 120V 
compact

[[Page 22553]]

clothes dryers, 56 percent for 240V compact clothes dryers, 26 percent 
for gas clothes dryers, zero percent for ventless 240V clothes dryers, 
and zero percent for combination washer/dryers. The fraction of 
consumers experiencing an LCC cost is 19 percent for electric standard 
clothes dryers, 4 percent for 120V compact clothes dryers, 2 percent 
for 240V compact clothes dryers, 32 percent for gas clothes dryers, 
zero percent for ventless 240V clothes dryers, and zero percent for 
combination washer/dryers.
---------------------------------------------------------------------------

    \64\ For these product classes, the efficiency level at TSL 4 is 
the same as the baseline efficiency level, so no consumers are 
impacted and therefore calculation of a payback period is not 
applicable.
---------------------------------------------------------------------------

    At TSL 4, the projected change in INPV ranges from a decrease of 
$64.5 million to a decrease of $80.6 million. The design changes 
required at TSL 4 for the most common standard-size gas and electric 
products are incremental improvements that are well known in the 
industry but would still require moderate product and capital 
conversion costs to implement. At TSL 4, DOE recognizes the risk of 
negative impacts if manufacturers' expectations concerning reduced 
profit margins are realized. If the high end of the range of impacts is 
reached as DOE expects, TSL 4 could result in a net loss of 8.0 percent 
in INPV to clothes dryer manufacturers.
    DOE concludes that at TSL 4 for residential clothes dryers, the 
benefits of energy savings, generating capacity reductions, emission 
reductions and the estimated monetary value of the CO<INF>2</INF> 
emissions reductions, and positive NPV of consumer benefits outweigh 
the economic burden on some consumers due to the increases in product 
cost and the profit margin impacts that could result in a reduction in 
INPV for the manufacturers.
    In addition, the efficiency levels in TSL 4 correspond to the 
recommended levels in the consensus agreement, which DOE believes sets 
forth a statement by interested persons that are fairly representative 
of relevant points of view (including representatives of manufacturers 
of covered products, States, and efficiency advocates) and contains 
recommendations with respect to an energy conservation standard that 
are in accordance with 42 U.S.C. 6295(o). Moreover, DOE has encouraged 
the submission of consensus agreements as a way to get diverse 
stakeholders together, to develop an independent and probative analysis 
useful in DOE standard setting, and to expedite the rulemaking process. 
DOE also believes that standard levels recommended in the consensus 
agreement may increase the likelihood for regulatory compliance, while 
decreasing the risk of litigation.
    After considering the analysis, comments to the preliminary TSD, 
and the benefits and burdens of TSL 4, the Secretary concludes that 
this trial standard level 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 adopts TSL 4 for residential clothes dryers. The amended 
energy conservation standards for clothes dryers, expressed as CEF, are 
shown in Table V-50 .

  Table V-50--Amended Energy Conservation Standards for Clothes Dryers
------------------------------------------------------------------------
                       Residential clothes dryers
-------------------------------------------------------------------------
                                                          Minimum CEF
                    Product class                        levels lb/kWh
------------------------------------------------------------------------
1. Vented Electric, Standard (4.4 ft\3\ or greater                  3.73
 capacity)...........................................
2. Vented Electric, Compact (120 V) (less than 4.4                  3.61
 ft\3\ capacity).....................................
3. Vented Electric, Compact (240 V) (less than 4.4                  3.27
 ft\3\ capacity).....................................
4. Vented Gas........................................               3.30
5. Ventless Electric, Compact (240 V) (less than 4.4                2.55
 ft\3\ capacity).....................................
6. Ventless Electric Combination Washer/Dryer........               2.08
------------------------------------------------------------------------

2. Benefits and Burdens of TSLs Considered for Room Air Conditioners
    Table V-51 and Table V-52 present a summary of the quantitative 
impacts estimated for each TSL for room air conditioners. The 
efficiency levels contained in each TSL are described in section V.A.

                             Table V-51--Summary of Results for Room Air Conditioner Trial Standard Levels: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Category                   TSL 1                TSL 2                TSL 3                TSL 4               TSL 5               TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings        0.105..............  0.205..............  0.218..............  0.305.............  0.477.............  0.665.
 (quads).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NPV of Consumer Benefits (2009$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate.............  0.75...............  1.30...............  1.51...............  1.47..............  1.46..............  (5.62).
7% discount rate.............  0.35...............  0.57...............  0.71...............  0.57..............  0.33..............  (4.44).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....  9.83...............  11.9...............  12.5...............  17.4..............  26.9..............  37.7.
NOX (thousand tons)..........  8.02...............  9.69...............  10.2...............  14.2..............  21.9..............  30.7.
Hg (ton).....................  0.012..............  0.015..............  0.017..............  0.022.............  0.032.............  0.044.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Value of Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2009$ million) *........  43 to 648..........  52 to 790..........  55 to 826..........  77 to 1164........  118 to 1803.......  166 to 2541.
NOX--3% discount rate (2009$   2.34 to 24.0.......  2.83 to 29.1.......  2.99 to 30.7.......  4.16 to 42.7......  6.40 to 65.8......  8.96 to 92.1.
 million).

[[Page 22554]]

 
NOX--7% discount rate (2009$   1.25 to 12.9.......  1.50 to 15.4.......  1.61 to 16.6.......  2.2 to 22.6.......  3.35 to 34.4......  4.64 to 47.7.
 million).
Generation Capacity Reduction  0.348..............  0.429..............  0.436..............  0.632.............  1.01..............  1.46.
 (GW) **.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Potential Changes in     N/A................  N/A................  N/A................  N/A...............  N/A...............  N/A.
 Domestic Production Workers
 in 2014 (thousands).
Indirect Domestic Jobs         0.74...............  0.73...............  0.74...............  1.16..............  1.94..............  3.07.
 (thousands) **.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
** Changes in 2043.


                                        Table V-52--Summary of Results for Room Air Conditioner Trial Standard Levels: Consumer and Manufacturer Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Category                        TSL 1                      TSL 2                      TSL 3                      TSL 4                      TSL 5                     TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Manufacturer Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million)....  (44.2) to (84.9).........  (65.4) to (112.7)........  (65.7) to (112.4)........  (111.3) to (177.6).......  (86.6) to (184.4).......  (80.2) to (344.5).
Industry NPV (% change).........  (4.6) to (8.9)...........  (6.8) to (11.8)..........  (6.9) to (11.8)..........  (11.6) to (18.6).........  (9.1) to (19.3).........  (8.4) to (36.0).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Consumer Mean LCC Savings * (2009$)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
< 6,000 Btu/h, with Louvers.....  $9.......................  $11......................  $9.......................  $7.......................  $7......................  ($58).
8,000-13,999 Btu/h, with Louvers  $16......................  $16......................  $22......................  $22......................  $22.....................  ($38).
20,000-24,999 Btu/h, with         $6.......................  $6.......................  $0.......................  $6.......................  $0......................  ($214).
 Louvers.
> 25,000 Btu/h, with Louvers....  $1.......................  $1.......................  $0.......................  $1.......................  $0......................  ($227).
8,000-10,999 Btu/h, without       $4.......................  $4.......................  $13......................  $13......................  $20.....................  ($66).
 Louvers.
> 11,000 Btu/h, without Louvers.  $5.......................  $5.......................  $11......................  $11......................  $11.....................  ($64).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Consumer Median PBP (years) **
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
<6,000 Btu/h, with Louvers......  4.1......................  5.8......................  4.1......................  8.6......................  8.6.....................  20.9.
8,000-13,999 Btu/h, with Louvers  0.0......................  0.0......................  2.8......................  2.8......................  7.1.....................  14.7.
20,000-24,999 Btu/h, with         4.3......................  4.3......................  n/a......................  4.3......................  n/a.....................  73.8.
 Louvers.
> 25,000 Btu/h, with Louvers....  10.3.....................  10.3.....................  n/a......................  10.1.....................  n/a.....................  107.7.
8,000-10,999 Btu/h, without       1.5......................  1.5......................  2.1......................  2.1......................  4.9.....................  25.2.
 Louvers.
> 11,000 Btu/h, without Louvers.  2.6......................  2.6......................  3.7......................  3.7......................  3.7.....................  25.9.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Distribution of Consumer LCC Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
< 6,000 Btu/h, with Louvers:
    Net Cost (%)................  21%......................  33%......................  21%......................  65%......................  65%.....................  90%.
    No Impact (%)...............  31%......................  31%......................  31%......................  1%.......................  1%......................  0%.
    Net Benefit (%).............  48%......................  37%......................  48%......................  34%......................  34%.....................  10%.
8,000-13,999 Btu/h, with
 Louvers:
    Net Cost (%)................  9%.......................  9%.......................  34%......................  34%......................  56%.....................  77%.
    No Impact (%)...............  60%......................  60%......................  2%.......................  2%.......................  1%......................  0%.
    Net Benefit (%).............  30%......................  30%......................  64%......................  64%......................  43%.....................  22%.

[[Page 22555]]

 
20,000-24,999 Btu/h, with
 Louvers:
    Net Cost (%)................  5%.......................  5%.......................  0%.......................  5%.......................  0%......................  98%.
    No Impact (%)...............  85%......................  85%......................  0%.......................  85%......................  0%......................  2%.
    Net Benefit (%).............  10%......................  10%......................  0%.......................  10%......................  0%......................  0%.
> 25,000 Btu/h, with Louvers:
    Net Cost (%)................  11%......................  11%......................  0%.......................  9%.......................  0%......................  100%.
    No Impact (%)...............  85%......................  85%......................  0%.......................  88%......................  0%......................  0%.
    Net Benefit (%).............  4%.......................  4%.......................  0%.......................  4%.......................  0%......................  0%.
8,000-10,999 Btu/h, without
 Louvers:
    Net Cost (%)................  1%.......................  1%.......................  12%......................  12%......................  38%.....................  92%.
    No Impact (%)...............  90%......................  90%......................  25%......................  25%......................  6%......................  2%.
    Net Benefit (%).............  9%.......................  9%.......................  62%......................  62%......................  56%.....................  6%.
> 11,000 Btu/h, without Louvers:
    Net Cost (%)................  2%.......................  2%.......................  23%......................  23%......................  23%.....................  93%.
    No Impact (%)...............  90%......................  90%......................  31%......................  31%......................  31%.....................  0%.
    Net Benefit (%).............  8%.......................  8%.......................  47%......................  47%......................  47%.....................  7%.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* For LCCs, a negative value means an increase in LCC by the amount indicated.
** In some cases the standard level is the same as the baseline efficiency level, so no consumers are impacted and therefore calculation of a payback period is not applicable.

    DOE first considered TSL 6, which represents the max-tech 
efficiency levels. TSL 6 would save 0.665 quads of energy, an amount 
DOE considers significant. Under TSL 6, the NPV of consumer benefit 
would be -$4.44 billion, using a discount rate of 7 percent, and -$5.62 
billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 6 are 37.7 Mt of 
CO<INF>2</INF>, 30.7 thousand tons of NO<INF>X</INF>, and 0.044 tons of 
Hg. The estimated monetary value of the CO<INF>2</INF> emissions 
reductions at TSL 6 ranges from $166 million to $2,541 million. Total 
generating capacity in 2043 is estimated to decrease by 1.46 GW under 
TSL 6.
    At TSL 6, the average LCC impact is a cost (LCC increase) of $58 
for room air conditioners < 6,000 Btu/h, with louvers; a cost of $38 
for room air conditioners 8,000-13,999 Btu/h, with louvers; a cost of 
$214 for room air conditioners 20,000-24,999 Btu/h, with louvers; a 
cost of $227 for room air conditioners > 25,000 Btu/h, with louvers; a 
cost of $66 for room air conditioners 8,000-10,999 Btu/h, without 
louvers; and a cost of $64 for room air conditioners > 11,000 Btu/h, 
without louvers. The median payback period is 20.9 years for room air 
conditioners < 6,000 Btu/h, with louvers; 14.7 years for room air 
conditioners 8,000-13,999 Btu/h, with louvers; 73.8 years for room air 
conditioners 20,000-24,999 Btu/h, with louvers; 107.7 years for room 
air conditioners > 25,000 Btu/h, with louvers; 25.2 years for room air 
conditioners 8,000-10,999 Btu/h, without louvers; and 25.9 years for 
room air conditioners > 11,000 Btu/h, without louvers. The fraction of 
consumers experiencing an LCC benefit is 10 percent for room air 
conditioners < 6,000 Btu/h, with louvers; 22 percent for room air 
conditioners 8,000-13,999 Btu/h, with louvers; zero percent for room 
air conditioners 20,000-24,999 Btu/h, with louvers; zero percent for 
room air conditioners > 25,000 Btu/h, with louvers; 6 percent for room 
air conditioners 8,000-10,999 Btu/h, without louvers; and 7 percent for 
room air conditioners > 11,000 Btu/h, without louvers. The fraction of 
consumers experiencing an LCC cost is 90 percent for room air 
conditioners < 6,000 Btu/h, with louvers; 77 percent for room air 
conditioners 8,000-13,999 Btu/h, with louvers; 98 percent for room air 
conditioners 20,000-24,999 Btu/h, with louvers; 100 percent for room 
air conditioners > 25,000 Btu/h, with louvers; 92 percent for room air 
conditioners 8,000-10,999 Btu/h, without louvers; and 93 percent for 
room air conditioners > 11,000 Btu/h, without louvers.
    At TSL 6, the projected change in INPV ranges from a decrease of 
$80.2 million to a decrease of $344.5 million. At TSL 6, DOE recognizes 
the risk of large negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high end of the 
range of impacts is reached as DOE expects, TSL 6 could result in a net 
loss of 36.0 percent in INPV to room air conditioner manufacturers.
    The Secretary concludes that at TSL 6 for room air conditioners, 
the benefits of energy savings, generating capacity reductions, 
emission reductions, and the estimated monetary value of the 
CO<INF>2</INF> emissions reductions would be outweighed by the negative 
NPV of consumer benefits, the economic burden on a significant fraction 
of consumers due to the large increases in product cost, and the 
capital conversion costs and profit margin impacts that could result in 
a large reduction in INPV for the manufacturers. Consequently, the 
Secretary has concluded that TSL 6 is not economically justified.
    DOE next considered TSL 5. TSL 5 would save 0.477 quads of energy, 
an amount DOE considers significant. Under TSL 5, the NPV of consumer 
benefit would be $0.33 billion, using a discount rate of 7 percent, and 
$1.46 billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 26.9 Mt of 
CO<INF>2</INF>, 21.9 thousand tons of NO<INF>X</INF>, and 0.032 ton of 
Hg. The estimated monetary value of the CO<INF>2</INF> emissions 
reductions at TSL 5 ranges from $118 million to $1,803 million. Total 
generating capacity in 2043 is estimated to decrease by 1.01 GW under 
TSL 5.
    At TSL 5, the average LCC impact is a savings (LCC decrease) of $7 
for room air conditioners < 6,000 Btu/h, with louvers; a savings of $22 
for room air conditioners 8,000-13,999 Btu/h, with

[[Page 22556]]

louvers; a savings of $0 for room air conditioners 20,000-24,999 Btu/h, 
with louvers; a savings of $0 for room air conditioners > 25,000 Btu/h, 
with louvers; a savings of $20 for room air conditioners 8,000-10,999 
Btu/h, without louvers; and a savings of $11 for room air conditioners 
> 11,000 Btu/h, without louvers. The median payback period is 8.6 years 
for room air conditioners < 6,000 Btu/h, with louvers; 7.1 years for 
room air conditioners 8,000-13,999 Btu/h, with louvers; not applicable 
for room air conditioners 20,000-24,999 Btu/h, with louvers or for room 
air conditioners > 25,000 Btu/h, with louvers; \65\ 4.9 years for room 
air conditioners 8,000-10,999 Btu/h, without louvers; and 3.7 years for 
room air conditioners > 11,000 Btu/h, without louvers. The fraction of 
consumers experiencing an LCC benefit is 34 percent for room air 
conditioners <6,000 Btu/h, with louvers; 43 percent for room air 
conditioners 8,000-13,999 Btu/h, with louvers; zero percent for room 
air conditioners 20,000-24,999 Btu/h, with louvers; zero percent for 
room air conditioners > 25,000 Btu/h, with louvers; 56 percent for room 
air conditioners 8,000-10,999 Btu/h, without louvers; and 47 percent 
for room air conditioners > 11,000 Btu/h, without louvers. The fraction 
of consumers experiencing an LCC cost is 65 percent for room air 
conditioners <6,000 Btu/h, with louvers; 56 percent for room air 
conditioners 8,000-13,999 Btu/h, with louvers; zero percent for room 
air conditioners 20,000-24,999 Btu/h, with louvers; zero percent for 
room air conditioners > 25,000 Btu/h, with louvers; 38 percent for room 
air conditioners 8,000-10,999 Btu/h, without louvers; and 23 percent 
for room air conditioners > 11,000 Btu/h, without louvers.
---------------------------------------------------------------------------

    \65\ In these cases the standard level is the same as the 
baseline efficiency level, so no consumers are impacted and 
therefore calculation of a payback period is not applicable.
---------------------------------------------------------------------------

    At TSL 5, the projected change in INPV ranges from a decrease of 
$86.6 million to a decrease of $184.4 million. At TSL 5, DOE recognizes 
the risk of moderately negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high end of the 
range of impacts is reached as DOE expects, TSL 5 could result in a net 
loss of 19.3 percent in INPV to room air conditioner manufacturers.
    The Secretary concludes that at TSL 5 for room air conditioners, 
the benefits of energy savings, positive NPV of consumer benefits, 
generating capacity reductions, emission reductions, and the estimated 
monetary value of the CO<INF>2</INF> emissions reductions would be 
outweighed by the economic burden on a significant fraction of 
consumers in some product classes due to the large increases in product 
cost, and the capital conversion costs and profit margin impacts that 
could result in a moderate reduction in INPV for the manufacturers. In 
particular, the fraction of consumers experiencing an LCC cost is 56 
percent for room air conditioners with 8,000-13,999 Btu/h, with 
louvers, which is the product class with the largest market share. 
Based on the above findings, the Secretary has concluded that TSL 5 is 
not economically justified.
    DOE then considered TSL 4. TSL 4 would save 0.305 quads of energy, 
an amount DOE considers significant. Under TSL 4, the NPV of consumer 
benefit would be $0.57 billion, using a discount rate of 7 percent, and 
$1.47 billion, using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 17.4 Mt of 
CO<INF>2</INF>, 14.2 thousand tons of NO<INF>X</INF>, and 0.022 ton of 
Hg. The estimated monetary value of the CO<INF>2</INF> emissions 
reductions at TSL 4 ranges from $77 million to $1,164 million. Total 
generating capacity in 2043 is estimated to decrease by 0.632 GW under 
TSL 4.
    At TSL 4, DOE projects that the average LCC impact is a savings 
(LCC decrease) of $7 for room air conditioners < 6,000 Btu/h, with 
louvers; a savings of $22 for room air conditioners 8,000-13,999 Btu/h, 
with louvers; a savings of $6 for room air conditioners 20,000-24,999 
Btu/h, with louvers; a savings of $1 for room air conditioners > 25,000 
Btu/h, with louvers; a savings of $13 for room air conditioners 8,000-
10,999 Btu/h, without louvers; and a savings of $11 for room air 
conditioners > 11,000 Btu/h, without louvers. The median payback period 
is 8.6 years for room air conditioners < 6,000 Btu/h, with louvers; 2.8 
years for room air conditioners 8,000-13,999 Btu/h, with louvers; 4.3 
years for room air conditioners 20,000-24,999 Btu/h, with louvers; 10.1 
years for room air conditioners > 25,000 Btu/h, with louvers; 2.1 years 
for room air conditioners 8,000-10,999 Btu/h, without louvers; and 3.7 
years for room air conditioners > 11,000 Btu/h, without louvers. The 
fraction of consumers experiencing an LCC benefit is 34 percent for 
room air conditioners < 6,000 Btu/h, with louvers; 64 percent for room 
air conditioners 8,000-13,999 Btu/h, with louvers; 10 percent for room 
air conditioners 20,000-24,999 Btu/h, with louvers; 4 percent for room 
air conditioners > 25,000 Btu/h, with louvers; 62 percent for room air 
conditioners 8,000-10,999 Btu/h, without louvers; and 47 percent for 
room air conditioners > 11,000 Btu/h, without louvers. The fraction of 
consumers experiencing an LCC cost is 65 percent for room air 
conditioners < 6,000 Btu/h, with louvers; 34 percent for room air 
conditioners 8,000-13,999 Btu/h, with louvers; 5 percent for room air 
conditioners 20,000-24,999 Btu/h, with louvers; 9 percent for room air 
conditioners > 25,000 Btu/h, with louvers; 12 percent for room air 
conditioners 8,000-10,999 Btu/h, without louvers; and 23 percent for 
room air conditioners > 11,000 Btu/h, without louvers.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$111.3 million to a decrease of $177.6 million. DOE recognizes the risk 
of moderately negative impacts if manufacturers' expectations 
concerning reduced profit margins are realized. If the high end of the 
range of impacts is reached as DOE expects, TSL 4 could result in a net 
loss of 18.6 percent in INPV to room air conditioner manufacturers.
    The Secretary concludes that at TSL 4 for room air conditioners, 
the benefits of energy savings, generating capacity reductions, 
emission reductions and the estimated monetary value of the 
CO<INF>2</INF> emissions reductions, positive NPV of consumer benefits 
and positive average consumer LCC savings outweigh the economic burden 
on some consumers (a significant fraction for one product class but 
small to moderate fractions for the other product classes) due to the 
increases in product cost, and the capital conversion costs and profit 
margin impacts that could result in a moderate reduction in INPV for 
the manufacturers.
    In addition, the efficiency levels in TSL 4 correspond to the 
recommended levels in the consensus agreement, which DOE believes sets 
forth a statement by interested persons that are fairly representative 
of relevant points of view (including representatives of manufacturers 
of covered products, States, and efficiency advocates) and contains 
recommendations with respect to an energy conservation standard that 
are in accordance with 42 U.S.C. 6295(o). Moreover, DOE has encouraged 
the submission of consensus agreements as a way to get diverse 
stakeholders together, to develop an independent and probative analysis 
useful in DOE standard setting, and to expedite the rulemaking process. 
DOE also believes that standard levels recommended in the consensus 
agreement may increase the likelihood for regulatory

[[Page 22557]]

compliance, while decreasing the risk of litigation.
    After considering the analysis, comments on the preliminary TSD, 
and the benefits and burdens of TSL 4, DOE concludes that this trial 
standard level 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 adopts TSL 
4 for room air conditioners. The amended energy conservation standards 
for room air conditioners, expressed as CEER, are shown in Table V-53.

     Table V-53--Amended Energy Conservation Standards for Room Air
                              Conditioners
------------------------------------------------------------------------
                          Room air conditioners
-------------------------------------------------------------------------
                                                          Minimum CEER
                    Product class                        levels Btu/Wh
------------------------------------------------------------------------
1. Without reverse cycle, with louvered sides, and                  11.0
 less than 6,000 Btu/h...............................
2. Without reverse cycle, with louvered sides, and                  11.0
 6,000 to 7,999 Btu/h................................
3. Without reverse cycle, with louvered sides, and                  10.9
 8,000 to 13,999 Btu/h...............................
4. Without reverse cycle, with louvered sides, and                  10.7
 14,000 to 19,999 Btu/h..............................
5a. Without reverse cycle, with louvered sides, and                  9.4
 20,000 to 24,999 Btu/h..............................
5b. Without reverse cycle, with louvered sides, and                  9.0
 25,000 Btu/h or more................................
6. Without reverse cycle, without louvered sides, and               10.0
 less than 6,000 Btu/h...............................
7. Without reverse cycle, without louvered sides, and               10.0
 6,000 to 7,999 Btu/h................................
8a. Without reverse cycle, without louvered sides,                   9.6
 and 8,000 to 10,999 Btu/h...........................
8b. Without reverse cycle, without louvered sides,                   9.5
 and 11,000 to 13,999 Btu/h..........................
9. Without reverse cycle, without louvered sides, and                9.3
 14,000 to 19,999 Btu/h..............................
10. Without reverse cycle, without louvered sides,                   9.4
 and 20,000 Btu/h or more............................
11. With reverse cycle, with louvered sides, and less                9.8
 than 20,000 Btu/h...................................
12. With reverse cycle, without louvered sides, and                  9.3
 less than 14,000 Btu/h..............................
13. With reverse cycle, with louvered sides, and                     9.3
 20,000 Btu/h or more................................
14. With reverse cycle, without louvered sides, and                  8.7
 14,000 Btu/h or more................................
15. Casement-Only....................................                9.5
16. Casement-Slider..................................               10.4
------------------------------------------------------------------------

3. 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 2009$, 
of the benefits from operating products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in equipment purchase costs, which is 
another way of representing consumer NPV), and (2) the monetary value 
of the benefits of emission reductions, including CO<INF>2</INF> 
emission reductions.\66\ The value of the CO<INF>2</INF> reductions, 
otherwise known as the Social Cost of Carbon (SCC), is calculated using 
a range of values per metric ton of CO<INF>2</INF> developed by a 
recent interagency process. The monetary costs and benefits of 
cumulative emissions reductions are reported in 2009$ to permit 
comparisons with the other costs and benefits in the same dollar units.
---------------------------------------------------------------------------

    \66\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2011, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of three and seven percent 
for all costs and benefits except for the value of CO<INF>2</INF> 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table V.50. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in 2011, that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined would be a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO<INF>2</INF> 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 CO<INF>2</INF> reductions is 
based on a global value. Second, the assessments of operating cost 
savings and CO<INF>2</INF> savings 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 2014-2043. The SCC values, on the other hand, reflect the present 
value of future climate-related impacts resulting from the emission of 
one ton of carbon dioxide in each year. These impacts go well beyond 
2100.
    Table V-54 and Table V-55 show the annualized values for clothes 
dryers and room air conditioners, respectively. Using a 7-percent 
discount rate and the SCC value of $22.1/ton in 2010 (in 2009$), the 
cost of the standards for clothes dryers in today's rule is $52.3 
million per year in increased equipment costs, while the annualized 
benefits are $139.1 million per year in reduced equipment operating 
costs, $25.0 million in CO<INF>2</INF> reductions, and $0.9 million in 
reduced NO<INF>X</INF> emissions. In this case, the net benefit amounts 
to $112.7 million per year. DOE has calculated that the annualized 
increased equipment cost can range from $50.5 to $66.6 million per year 
depending on assumptions and modeling of equipment price trends. The 
high end of this range corresponds to a constant real equipment price 
trend. Using the central estimate of energy-related benefits, DOE 
estimates that calculated net benefits can range from $98.4 to $114.5 
million per year. Using a 3-percent discount rate and the SCC value of 
$22.1/ton in 2010 (in 2009$), the cost of the standards for clothes 
dryers in today's rule is $55.4 million per year in increased equipment 
costs, while the benefits are $209.1 million per year in reduced 
operating costs, $25.0 million in CO<INF>2</INF> reductions, and $1.4 
million in reduced NO<INF>X</INF> emissions. In this case, the net 
benefit amounts to $180.1 million per year. DOE has calculated that the 
range in the annualized increased equipment cost can range from $53.1 
to $73.5 million per year depending on assumptions and modeling of 
equipment price trends. The high end of this range corresponds to a 
constant real equipment price trend. Using the central estimate of 
energy-

[[Page 22558]]

related benefits, DOE estimates that calculated net benefits can range 
from $162.0 to $182.4 million per year.
    Using a 7-percent discount rate and the SCC value of $22.1/ton in 
2010 (in 2009$), the cost of the standards for room air conditioners in 
today's rule is $107.7 million per year in increased equipment costs, 
while the annualized benefits are $153.7 million per year in reduced 
equipment operating costs, $19.5 million in CO<INF>2</INF> reductions, 
and $0.999 million in reduced NO<INF>X</INF> emissions. In this case, 
the net benefit amounts to $66.4 million per year. DOE has calculated 
that the annualized increased equipment cost can range from $105.7 to 
$136.6 million per year depending on assumptions and modeling of 
equipment price trends. The high end of this range corresponds to a 
constant real equipment price trend. Using the central estimate of 
energy-related benefits, DOE estimates that calculated net benefits can 
range from $37.5 to $68.4 million per year. Using a 3-percent discount 
rate and the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the 
standards for room air conditioners in today's rule is $111.0 million 
per year in increased equipment costs, while the benefits are $186.2 
million per year in reduced operating costs, $19.5 million in 
CO<INF>2</INF> reductions, and $1.20 million in reduced NO<INF>X</INF> 
emissions. In this case, the net benefit amounts to $95.9 million per 
year. DOE has calculated that the range in the annualized increased 
equipment cost can range from $108.0 to $146.0 million per year 
depending on assumptions and modeling of equipment price trends. The 
high end of this range corresponds to a constant real equipment price 
trend. Using the central estimate of energy-related benefits, DOE 
estimates that calculated net benefits can range from $60.9 to $98.9 
million per year.

                       Table V-54--Annualized Benefits and Costs of Amended Standards (TSL 4) for Clothes Dryers Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Monetized (million 2009$/year)
                                                        Discount rate      -----------------------------------------------------------------------------
                                                                               Primary estimate> *         Low estimate> *          High estimate> *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........................                       7%                     139.1                     120.6                     158.3
                                                                       3%                     209.1                     177.4                     241.3
CO2 Reduction at $4.9/t **......................                       5%                       6.0                       6.0                       6.0
CO2 Reduction at $22.1/t **.....................                       3%                      25.0                      25.0                      25.0
CO2 Reduction at $36.3/t **.....................                     2.5%                      39.8                      39.8                      39.8
CO2 Reduction at $67.1/t **.....................                       3%                      76.0                      76.0                      76.0
NOX Reduction at $2,519/ton **..................                       7%                       0.9                       0.9                       0.9
                                                                       3%                       1.4                       1.4                       1.4
    Total[dagger]...............................                 7% plus CO2 range   146.1 to 216.1            127.6 to 197.6            165.3 to 235.3
                                                                       7%                     165.0                     146.5                     184.3
                                                                       3%                     235.4                     203.7                     267.6
                                                                 3% plus CO2 range   216.5 to 286.5            184.8 to 254.8            248.7 to 318.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs.......................                       7%                      52.3                      66.6                      50.5
                                                                       3%                      55.4                      73.5                      53.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Total Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total [dagger]..............................                 7% plus CO2 range    93.7 to 163.7             61.0 to 131.0            114.8 to 184.8
                                                                       7%                     112.7                      79.9                     133.8
                                                                       3%                     180.1                     130.2                     214.5
                                                                 3% plus CO2 range   161.1 to 231.1            111.3 to 181.3            195.6 to 265.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Primary, Low, and High Estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
  and High Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
  for equipment prices, and the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate sensitivity
  for the equipment price trend.
** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and
  $36.3 per ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of
  $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2009$) is the
  average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
  $22.1/ton in 2010 (in 2009$). 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.


                   Table V-55--Annualized Benefits and Costs of Amended Standards (TSL 4) for Room Air Conditioners Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Monetized (million 2009$/year)
                                                        Discount rate      -----------------------------------------------------------------------------
                                                                               Primary estimate *          Low estimate *            High estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........................                       7%                     153.7                     145.1                     161.9
                                                                       3%                     186.2                     174.2                     197.3
CO[ihel2] Reduction at $4.9/t **................                       5%                       5.0                       5.0                       5.0
CO[ihel2] Reduction at $22.1/t **...............                       3%                      19.5                      19.5                      19.5

[[Page 22559]]

 
CO[ihel2] Reduction at $36.3/t **...............                     2.5%                      30.7                      30.7                      30.7
CO[ihel2] Reduction at $67.1/t **...............                       3%                      59.4                      59.4                      59.4
NOX Reduction at $2,519/ton **..................                       7%                     0.999                     0.999                     0.999
                                                                       3%                     1.197                     1.197                     1.197
    Total [dagger]..............................                 7% plus CO[ihel2] ra159.6 to 214.0            151.1 to 205.5            167.9 to 222.3
                                                                       7%                     174.1                     165.5                     182.4
                                                                       3%                     206.8                     194.9                     218.0
                                                                 3% plus CO[ihel2] ra192.3 to 246.7            180.4 to 234.8            203.5 to 257.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs.......................                       7%                     107.7                     136.6                     105.7
                                                                       3%                     111.0                     146.0                     108.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Total Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total [dagger]..............................                 7% plus CO[ihel2] ran51.9 to 106.3              43.4 to 97.8             62.2 to 116.6
                                                                       7%                      66.4                      28.9                      76.7
                                                                       3%                      95.9                      48.9                     110.0
                                                                 3% plus CO[ihel2] ran81.4 to 135.8              34.4 to 88.8             95.5 to 149.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Primary, Low, and High Estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
  and Low Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
  for equipment prices, and the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate sensitivity
  for the equipment price trend.
** The CO[ihel2] values represent global values (in 2009$) of the social cost of CO[ihel2] emissions in 2010 under several scenarios. The values of
  $4.9, $22.1, and $36.3 per ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates,
  respectively. The value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value
  for NOX (in 2009$) is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
  $22.1/ton in 2010 (in 2009$). In the rows labeled as ``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.

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,'' 58 FR 51735 (Oct. 4, 1993), 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. 
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 clothes 
dryer and room air conditioner 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 clothes dryers and room air conditioners 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 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the draft rule and other documents 
prepared for this rulemaking, including the 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. They are available for public review in the 
Resource Room of DOE's Building Technologies Program, 950 L'Enfant 
Plaza, SW., Suite 600, Washington, DC 20024, (202) 586-2945, between 9 
a.m. and 4 p.m., Monday through Friday, except Federal holidays.
    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

[[Page 22560]]

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.
    We emphasize 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 direct final rule is consistent 
with these principles, including that, to the extent permitted by law, 
agencies adopt a regulation only upon a reasoned determination that its 
benefits justify its costs and select, in choosing among alternative 
regulatory approaches, those approaches that maximize net benefits.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of a final regulatory flexibility analysis (FRFA) for any 
rule that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking'' 67 FR 53461 (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://www.gc.doe.gov).
    For the manufacturers of residential clothes dryers and room air 
conditioners, 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, 30850 (May 15, 
2000), as amended at 65 FR 53533, 53545 (Sept. 5, 2000) and codified at 
13 CFR part 121. The size standards are listed by NAICS code and 
industry description and are available at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. 
Residential clothes dryer manufacturing is classified under NAICS Code 
335224, ``Household Laundry Equipment Manufacturing'' and room air 
conditioner manufacturing is classified under NAICS Code 333415, ``Air-
Conditioning and Warm Air Heating Equipment and Commercial and 
Industrial Refrigeration Equipment Manufacturing.'' The SBA sets a 
threshold of 1,000 employees or less and 750 employees or less, 
respectively, for these categories in order for an entity to be 
considered as a small business, as shown in Table VI-1.

 Table VI-1--SBA Classification of Small Businesses Potentially Affected
                              by This Rule
------------------------------------------------------------------------
                                                     Employee
       Industry description         Revenue limit     limit      NAICS
------------------------------------------------------------------------
Household Laundry Equipment        N/A............      1,000     335224
 Manufacturing.
Air-Conditioning and Warm Air      N/A............        750     333415
 Heating Equipment and Commercial
 and Industrial Refrigeration
 Equipment Manufacturing.
------------------------------------------------------------------------

    DOE reviewed the potential standard levels considered in today's 
notice under the provisions of the Regulatory Flexibility Act and the 
procedures and policies published on February 19, 2003. To estimate the 
number of small businesses that could be impacted by the amended energy 
conservation standards, DOE conducted a market survey using all 
available public information to identify potential small manufacturers. 
DOE's research included the AHAM membership directory, product 
databases (the AHRI, AHAM, CEC, and ENERGY STAR databases), individual 
company Web sites, and the SBA dynamic small business search to find 
potential small business manufacturers. DOE also asked stakeholders and 
industry representatives if they were aware of any other small business 
manufacturers during manufacturer interviews and at previous DOE public 
meetings. DOE reviewed all publicly available data and contacted 
various companies, as necessary, to determine whether they met the 
SBA's definition of a small business manufacturer of covered 
residential clothes dryers or room air conditioners. DOE screened out 
companies that did not offer products covered by this rulemaking, did 
not meet the definition of a ``small business,'' or are foreign owned 
and operated.
1. Residential Clothes Dryer Industry
    The majority of residential clothes dryers are currently 
manufactured in the United States by one corporation that accounts for 
over 70 percent of the market. Two additional large manufacturers with 
foreign and domestic production hold much of the remaining share of the 
market. The small portion of the remaining residential clothes dryer 
market is supplied by a combination of international and domestic 
companies, all of which have small market shares.
    Based on its review of the dynamic small business search on the SBA 
Web site (http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm), the Central 
Contracting Registration (https://www.bpn.gov/CCRSearch/Search.aspx), 
and input from commenters, DOE identified only one manufacturer who 
could potentially be considered a small business under NAICS Code 
335224, ``Household Laundry Equipment Manufacturing.'' DOE does not 
believe, however, that this company would be directly impacted by the 
standards established for clothes dryers in today's final rule. DOE 
notes that while the potential small business manufacturer has 
developed a highly efficient technology that could be used by other 
manufacturers to increase the efficiency of clothes dryers, the company 
does not produce clothes dryers and the technology is not yet 
commercially available. DOE acknowledges that the technology developed 
by this small business is a potential design option for clothes dryers, 
but DOE does not believe this rulemaking would in any way affect the 
ability of this company to commercialize or sell its technology.
2. Room Air Conditioner Industry
    No room air conditioners are manufactured in the United States. 
Most manufacturing takes place in Asia, primarily China, with limited 
production in Mexico. In recent years at least two major manufacturers 
have exited the market. At least three major

[[Page 22561]]

corporations supply a majority of the market. The remaining market 
share is held by several large companies. DOE did not identify any 
small business manufacturers of room air conditioners.
    For room air conditioners, DOE initially identified at least 11 
distinct manufacturers of room air conditioners sold in the United 
States. DOE initially determined that 10 of these were large or 
foreign-owned and operated. DOE determined that the one room air 
conditioner manufacturer that was previously designated as a small 
business manufacturer was acquired by another company and now exceeds 
SBA's employment threshold for consideration as a small business under 
the appropriate NAICS code. As such, DOE did not identify any small 
business manufacturers of room air conditioners.
    Based on the discussion above, DOE certifies that the standards for 
clothes dryers and room air conditioners set forth in today's 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 SBA as required by 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act

    Manufacturers of clothes dryers and room air conditioners 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 clothes 
dryers and room air conditioners, including any amendments adopted for 
those test procedures. DOE has proposed regulations for the 
certification and recordkeeping requirements for all covered consumer 
products and commercial equipment, including clothes dryers and room 
air conditioners. 75 FR 56796 (Sept. 16, 2010). 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 submitted to OMB for approval. 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

    DOE has prepared an environmental assessment (EA) of the impacts of 
the direct final rule pursuant to the National Environmental Policy Act 
of 1969 (42 U.S.C. 4321 et seq.), the regulations of the Council on 
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations 
for compliance with the National Environmental Policy Act (10 CFR part 
1021). This assessment includes an examination of the potential effects 
of emission reductions likely to result from the rule in the context of 
global climate change, as well as other types of environmental impacts. 
The EA has been incorporated into the direct final rule TSD as chapter 
15. DOE found that the environmental effects associated with the 
standards for clothes dryers and room air conditioners were not 
significant. Therefore, DOE is issuing a Finding of No Significant 
Impact (FONSI), pursuant to NEPA, the regulations of the Council on 
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations 
for compliance with NEPA (10 CFR part 1021). The FONSI is available in 
the docket for this rulemaking.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 
1999), imposes certain requirements on agencies formulating and 
implementing policies or regulations that preempt State law or that 
have federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. EPCA governs and 
prescribes Federal preemption of State regulations as to energy 
conservation for the products that are the subject of today's direct 
final 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.

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 (February 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 direct final 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. Public Law. 104-4, sec. 201 (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

[[Page 22562]]

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; also available at http://www.gc.doe.gov.
    Although today's rule does not contain a Federal intergovernmental 
mandate, it may impose expenditures of $100 million or more on the 
private sector. Specifically, the final rule could impose expenditures 
of $100 million or more. Such expenditures may include (1) investment 
in research and development and in capital expenditures by home 
appliance manufacturers in the years between the final rule and the 
compliance date for the new standard, and (2) incremental additional 
expenditures by consumers to purchase higher efficiency home 
appliances.
    Section 202 of UMRA authorizes an 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 notice and the ``Regulatory 
Impact Analysis'' section of the direct final rule TSD for this 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 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(h) and (o), 
6313(e), and 6316(a), today's rule would establish energy conservation 
standards for clothes dryers and room air conditioners 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 direct 
final rule TSD.

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 rule 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 (March 18, 1988), that this regulation would not 
result in any takings which 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, 2001 (44 U.S.C. 3516, note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and 
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has 
reviewed today's notice 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,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any proposed significant 
energy action. 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 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 concluded that today's regulatory action, which sets forth 
energy conservation standards for clothes dryers and room air 
conditioners, 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 direct final 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 (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

[[Page 22563]]

disseminated and is available at the following Web site: http://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.

M. Congressional Notification

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

VII. Public Participation

A. Submission of Comments

    DOE will accept comments, data, and information regarding this 
direct final rule no later than the date provided in the DATES section 
at the beginning of this rule. Interested parties may submit comments 
using any of the methods described in the ADDRESSES section at the 
beginning of this notice.
    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 (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 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. 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.
    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, 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 on 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. Email submissions are 
preferred. If you submit via mail or hand delivery, 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, written in English and 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 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).

VIII. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Reporting and 
recordkeeping requirements, and Small businesses.

    Issued in Washington, DC, on April 8, 2011.
Kathleen Hogan,
Deputy Assistant Secretary for Energy Efficiency, Office of Technology 
Development, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE amends 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.


0
2. Revise Sec.  430.32 paragraphs (b), and (h) to read as follows:

[[Page 22564]]

Sec.  430.32  Energy and water conservation standards and effective 
dates.

* * * * *
    (b) Room air conditioners.

------------------------------------------------------------------------
                                    Energy efficiency   Combined energy
                                     ratio, effective  efficiency ratio,
           Product class            from Oct. 1, 2000   effective as of
                                    to April 20, 2014    April 21, 2014
------------------------------------------------------------------------
1. Without reverse cycle, with                    9.7               11.0
 louvered sides, and less than
 6,000 Btu/h......................
2. Without reverse cycle, with                    9.7               11.0
 louvered sides, and 6,000 to
 7,999 Btu/h......................
3. Without reverse cycle, with                    9.8               10.9
 louvered sides, and 8,000 to
 13,999 Btu/h.....................
4. Without reverse cycle, with                    9.7               10.7
 louvered sides, and 14,000 to
 19,999 Btu/h.....................
5a. Without reverse cycle, with                   8.5                9.4
 louvered sides, and 20,000 to
 24,999 Btu/h.....................
5b. Without reverse cycle, with                   8.5                9.0
 louvered sides, and 25,000 Btu/h
 or more..........................
6. Without reverse cycle, without                 9.0               10.0
 louvered sides, and less than
 6,000 Btu/h......................
7. Without reverse cycle, without                 9.0               10.0
 louvered sides, and 6,000 to
 7,999 Btu/h......................
8a. Without reverse cycle, without                8.5                9.6
 louvered sides, and 8,000 to
 10,999 Btu/h.....................
8b. Without reverse cycle, without                8.5                9.5
 louvered sides, and 11,000 to
 13,999 Btu/h.....................
9. Without reverse cycle, without                 8.5                9.3
 louvered sides, and 14,000 to
 19,999 Btu/h.....................
10. Without reverse cycle, without                8.5                9.4
 louvered sides, and 20,000 Btu/h
 or more..........................
11. With reverse cycle, with                      9.0                9.8
 louvered sides, and less than
 20,000 Btu/h.....................
12. With reverse cycle, without                   8.5                9.3
 louvered sides, and less than
 14,000 Btu/h.....................
13. With reverse cycle, with                      8.5                9.3
 louvered sides, and 20,000 Btu/h
 or more..........................
14. With reverse cycle, without                   8.0                8.7
 louvered sides, and 14,000 Btu/h
 or more..........................
15. Casement-Only.................                8.7                9.5
16. Casement-Slider...............                9.5               10.4
------------------------------------------------------------------------

* * * * *
    (h) Clothes dryers. (1) Gas clothes dryers manufactured after 
January 1, 1988 shall not be equipped with a constant burning pilot.
    (2) Clothes dryers manufactured on or after May 14, 1994 and before 
April 21, 2014, shall have an energy factor no less than:

------------------------------------------------------------------------
                                                         Energy factor
                    Product class                          (lbs/kWh)
------------------------------------------------------------------------
i. Electric, Standard (4.4 ft\3\ or greater capacity)               3.01
ii. Electric, Compact (120V) (less than 4.4 ft\3\                   3.13
 capacity)...........................................
iii. Electric, Compact (240V) (less than 4.4 ft\3\                  2.90
 capacity)...........................................
iv. Gas..............................................               2.67
------------------------------------------------------------------------

     (3) Clothes dryers manufactured on or after April 21, 2014, shall 
have a combined energy factor no less than:

------------------------------------------------------------------------
                                                        Combined energy
                    Product class                      factor  (lbs/kWh)
------------------------------------------------------------------------
i. Vented Electric, Standard (4.4 ft\3\ or greater                  3.73
 capacity)...........................................
ii. Vented Electric, Compact (120V) (less than 4.4                  3.61
 ft\3\ capacity).....................................
iii. Vented Electric, Compact (240V) (less than 4.4                 3.27
 ft\3\ capacity).....................................
iv. Vented Gas.......................................               3.30
v. Ventless Electric, Compact (240V) (less than 4.4                 2.55
 ft\3\ capacity).....................................
vi. Ventless Electric, Combination Washer-Dryer......               2.08
------------------------------------------------------------------------

* * * * *

[FR Doc. 2011-9040 Filed 4-20-11; 8:45 am]
BILLING CODE 6450-01-P


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