55FR39624

39624

Proposed ides

This section of the FEDERAL REGISTER

contains notices to the public of the

proposed issuance of rules and

regulations. The purpose of these notices

is to give interested persons an

opportunity to participate in the ruse

'raking prior to the adoption of the final

Mies.

DEPARTMENT OF ENERGY

Office of Conservation and

Renewable Energy

to CFR Part 430

[Docket No. CE-RSA-90-2011

Energy Consorrtretion Program bor

Consumer Products; Advance Notice

of Proposed Rulemaking Regarding

Energy Conservation Standards for 9

Typea of Cortsorner Products

AGENCY: Office of Conservation and

Renewable Energy, Department of

Energy.

ACTION Advance notice of proposed

rulemaking,

ii-any: The Energy Policy and

Conservation Act (EPCA), as amended

by the National Energy Consert. ation

Policy Act (NTECPA), the National

Appliance Energy Conservation Act

(NAECA), and the National Appliance

Energy Conservation Amendments of

.1988 (NAECA 1988), prescribes energy

conservation standards for certain

major household appliances, and

requires the Department of Energy

(DOE) to administer an energy

conservation program for these

products, Among other things, ]SPCA., as

amended, requires DOE to consider

amending the aforesaid energy

conservation standards for room air

conditioners, water heaters, direct

heating equipment, mobile home

furnaces, kitchen ranges and ovens, pool

heaters, clothes washers, and

fluorescent lamp ballasts; and to

consider establishing energy

conservation standards for television

sets. By means of the instant rulemaking

proceeding, DOE intends to discharge

the aforesaid statutory responsibilities.

The purposes of this Advance Notice

of Proposed Rulemaking (ANOPR) are

to: (1) Present for comment the product

classes that DOE is planning to analyze;

42) present a detailed discussion of the

.tn.alytical methodology and analytical

i models that DOE expects to use in

performing analyses in connection with

the proposed rule; and (3) facilitate the

gathering of information and comments

prior to publishing a subsequent notice

of proposed rulemaking.

One of the products to be considered

herein, namely clothes washers, was the

subject of a previously published notice

of proposed rulemaking concerning

energy conservation standards., (54 FR

32744, Aug. 9, 1989). However,

subsequent to the October 10, 1989,

close of the comment period in that

proceeding, DOE became aware of a

clothes washer design option currently

in use in Europe which was not included

in the notice published by DOE and

upon which no comment was received.

This design option. (horizontal wash tub

axis in top-loading washers) appears to

have the potential for saving significant

amounts of energy and water.

Accordingly, DOE has determined to

include it in this rulemaking proceeding

in order to obtain information as to

whether it is economically justifiable.

Due to the absence of any connnent, the

horizontal axis design option will not be

addressed in the final rule to be

published later this year in the

previously commenced ullesnakhig

involving clothes washers and two other

types of consumer products.

GATES: Written comments in response to

this AINOPR must be received by DOE

by December 12, 1990.

AConesSeS: Written comments are to be

submitted to: U.S. Department of Energy,

Office of Conservation and Renewable

Energy, Hearings and D,,)r&ets, Energy

Efficiency Standards for Consumer

Products, Docket No. CE--90--201,

Room 0-025, Forrestal Building,10003

Independence Avenue, SW.,

Washington, DC 20585, (202) 586-3012.

FOR FURTHER rwwoRMATioN CotiTA T:

Dr. Barry P. Berlin, U.S. Department of

Energy, Office of Conservation and

Renewable Energy, Forrestal Building,

Mail Station CE-132, 1000

Independence Avenue, SW.,

Washington, DC 20585, (202) 585-9127.

Eugene Margolis, Esq., U.S. Department

of Energy, Office of General Counsel,

Forrestal Building, Mail Station GC12, 1000 Independence Avenue, SW.,

Washington, DC 20585, (202) 586-9507.

14UPPLE74ENTAIW INFORMATION:

I. Introduction

a. Authority

b. Background

Federal Register

Vol. 55, No. 189

Friday, September 28, ieoo

U. Methodology

III. Models, Data and Assumptions

P_ Engineering Performance Models and

Costing Analysis

1. Appliance classes

2. Baseline units

3. Design options

4. Maximum technologically feasible

designs

5. Performance models

6. Costing analysis

7. Price-efficiency relationships

8. Data sources

9. Outputs from the Engineering Analysis

b. LBL Residential Energy Model (LBL-RE I

1. Structure of the model

2. Housing stock submodel

3. Efficiency choice algorithm

4. Thermal integrity

5. Modeling efficiency standards

6. Turnover of appliance stocks

7. Calculation of market shares

8. Usage behavior

9. Energy consumption calculations

10. Model outputs

11. Other consumer impacts

c. Commercial Energy Model

d. Manufacturer Impact Models

1. Conceptual approach

2. Measures of impact

3. LBL Manufacturer Impac

MIM)

4. Data sources

e. Utility impact Model

f. Sensitivity Analyses

W. Comments

a. Questions for Public Comment

b, Comment Procedures

1. Introduction

a. Authority

Part B of title III of EPCA, Ptiblic La-.,v

94-163, as amended by NECI'A, Public

Law 95-839, NAECA, Public Law 100-12.

and NAECA 1988, Public Law 100--357,'

created the Energy Conservation

Program for Consumer Products other

than Automobiles (Program). The

consumer products subject to the

Program (often referred to hereafter as

"covered products") are: Refrigerators,

refrigerator-freezers and freezers;

dishwashers; clothes dryers; water

heaters; central air conditioners and

central air conditioning heat pumps;

furnaces; direct heating equipment;

television sets; kitchen ranges and

ovens; clothes washers; room air

conditioners; fluorescent lamp ballasts;

I Part B of title Ill of EPCA, as amended by

NECPA, INAECk and NAECA 1988, is referred to in

this ANOPR as the "Act." Part B of title. M is

codified at 42 L.S.C. 6291 atse,. Part B bf title i of

EPCA, as amended by NECPA only, is referred to cc

NECPA,

 CE-RM-90-201 COMMENT 0A

55FR39624

Proposed Rules

This section of the FEDERAL REGISTER

contains notices to the public of fue

proposed issuance of rules and

regulations. The purpose of \\hes!9 iiatices

is to give interested parsons an

opportunity to participate in the rule

making prior to the adoption of the final

rules.

IDEPARTMENT OF ENERGY

Office of Conser"a1ioi1 and

Renewable Energy

-au CFR Part 430

[Docket Nc. CE-RM-9o-:2uU

Energy Cons(!rJatlon Program tor

Consumer Products; Advance Notice

of Propo~dRu!emaldi"lg Regarding

IEll~'9Y Conservation Standards fer 9

Tyl'M",.$ 01 Co!'!sllmer Prodl.l~18

AGENCY: Office'of Conservation and

Renewable Energy, Deparffilent of

Energy.

,i\CTIOW: Advance notice of pwposed

rnlemaki.,g,

rsUMI\F,/o.,V: The Energy Polic:!,. and

Conservation Act (EPCA), as amended

by the National Energy Conser.alian

Policy Act (1\.'ECPA). the National

Appliance Energy Conservation Act

(NlillCA), and the National Appliance

Energy Conservation Amendments of

1988 (NASCA 1988), prescribes energy

conservation standards for certain

major household appliances, and

requires the Department of Energy

[DOE) to administer an energy

conservation program for these

products, Among other things. IF'pCA, as

amended. requires DOE to con:sider

amending the aforesaid energy

conservation standards for mom a.ir

conditioners, water heaters, direct

heatL'lg equipment. mobile home

furnaces, kitchen ranges and ovens, pool

heaters. clothes washers. and

fluorescent lamp ballasts; and to

consider establishing energy

conservation standards fall' television

£ets, By means of the instant rulemaking

proceeding, DOE intendB to discharge

the aforesaid statutory responsibilitiea.

The purposes ofthis Advance Notice

of Proposed Rulemaking (ANOPR) are

to: (1) Present for comment the product

classes that DOE ia planning to analyze;

f2) present a detailed discussion of the

malytical methodology and analytical

models that DOE expects to 'l!lie in

performing analyses in connection with

the proposed rule; and (3} facilitate the

gathering of information and comments

prior to publishing a subsequent notice

of proposed rulemaking,

One of Li.e products to be considered

berein. namely clothes washers, was the

subject of a previously published notice

of proposed rulemaking concerpjng

anal'S'! conservation standards., (1':4 FR

32744. Aug. 9. 1989). However.

subsequent to the October 10. 1989.

dose of the comment period in that

proceeding. DOE became aware of a

clothes washer design option currently

in use in Europe which was not included

in the notice published by DOE and

upon which no cOlIl..ment was received.

This design option (horizontal wash tub

axis in top-loading washers) appears to

have the potential for saving significant

am01l11ta of energy and water,

Accordingly, DOE has determined to

include it in this rulemakmg proceeding

in order to obtain information as to

whether it is economically justifiable.

Due to the absence of any comment, the

horizontal axis design option will not be

a.ddressed in the final rule to be

published later this Jrear in the

previously commenced rulemakL"lg

involving clothes washers and two other

t~'Pe8 of consumer products,

DATES: Written comments in response to

this ANOPR must be received by DOE

by December 12, 1990,

ADDRESSES: Written comments a1'S to be

IHl.bmiUed to: U.S, Department ofEneri5f.

Office of Conservation and Renewable

Energy. Hearings and DOi;kets. Energy

Efficiency Standards for Consumer

Products, Docket No, CE-RM-9D-Z01,

Room 6B-025. Forrestal Euilding, 1000

Independence Avenue. SW..

Washinglon, DC 20585. (202) 586-3012.

!FOR f'i.l~THER INfORMATiON CONTACT:

Dr. Barry P. Berlin. U.S. Department of

Energy, Office of Conservation and

Renewable Energy. Forrestal Building,

:lviail Station CE-132. 1000

Independence Avenue, SW.,

Washington, DC 20585. (202) 586-9127.

Eugene Mal'golis, Esq., U.S, Department

of Energy. Office of General Counsel,

Forrestal Building, Mail Station ce12,1000 Independence Avenue, SW.,

'Washington. DC 20535, (202) 586-9507.

~UPt'!.5roliENTA~V!NI"O~MttT'ION:

!. Introduction

8. Authority

1:1. Background

Federal Register

Vol. 55. No. 189

Friday, September 28, BOO

n. Methodology

III. Models, Data snd Assumptions

a. E...'lginecl'ing Performance Models and

Costing Analysis

1. Appliance classel!

2. Baseline units

3. Design options

4, Maximum tedmologically feasible

designs

5. Performance models

6. Costing analysis

7. Price-efficiency relationships

8. Data sources

9, Outputs from the Engineering Analysis

b. LBL Residential Energ-j Model iLBL-rmM'!

1. Structure of t..\e mode!

2. Housing stock submodel

3, Efficiency choice algorHhm

4. Thermal integrity

5. Modeling efficiency standards

6. Turnover of appliance stocks

7. Calculation of market shMes

8. Usage behavior

9. Energy consumptioll Gulculatiof.lll

10. Model outputs

11. Other consumer impacts

c. Commercial Energy Model

d. Manufacturer Impact Modem

1. Conceptnal approach

2. Measures of impact

3. LEt Manufacturer Impact MmM [lEL--

MIM)

4. Data sources

e. Utility Impact Model

f. Sensitivity Analyses

IV. Comments

8.. Questions for Public Cemment

b, Comment Procedures

I. IntJ:odutition

iI. Autl1011ty

Part B of title HI of EPCA, Public Law

94.-163. as amended by NECPA. Public

Law 95-619, N.i\ECA, PublIc La'\'1.' 100-12,

and NAECA 1988. Public Law 10>."Hi57, 1

created the Energy Conservation

Program for Consu,'Uer Products Dther

than Automobiles (Program), The

consumer products subject to the

Program (often referred to hereaft;er as

"covered products") are: Refrigeratol's.

refrigerator-freezers and freezers;

dishwashers; clot.1tes dryers; water

heaters; central air conditioners and

central air conditioni..'lg heat PlL\l1PS;

furnaces; direct heating equipment;

television sets; kitchen ranges and

ovens; dothes washers: room air

conditioner!!; fluorescent lamp baHasis;

, Part B of title ill of EPCA. as amended by

NECPA, NAECA. and NAECA 19l16, is referred io in

this ANOPR 8lS thlf "Act:' Peu'"t B of title ill is

codified al42 U.S.C. 62S1 atseq. Par! B'Of title W!>f

EPCA. liS emended by NECPA only, ie refe!"~ed 10 a~

NECPA.
55FR39624

Federal Register / Vol. 55, No. 189 / Friday, September 28, 1990 / Proposed Rules

and pool heaters; as well as any other

consumer product classified by the

Secretary of Energy (Secretary) = (section

322). To date, the Secretary has not so

classified any additional products.

Under the Act, the Program consists

essentially of three parts: Testing,

labeling, and mandatory energy

conservation standards. DOE, in

consultation with the National Institute

of Standards and Technology (NIST), is

required to amend or establish new test

procedures as appropriate for each of

the covered products (section 323). The

purpose of the test procedures is to

provide for test results that reflect the

energy efficiency, energy use, or

estimated annual operating costs of

each of the covered products (section

323(b)(3)).

The Federal Trade Commission (FTC)

is required by the Act to prescribe rules

governing the labeling of covered

products for which test procedures have

been prescribed by DOE (section

324(a)). These rules are to require that

each particular model of a covered

product bear a label that indicates its

annual operating cost and the range of

estimated annual operating costs for

other models of that product class

(section 324(c)(1)). At the present time

there are FTC rules requiring labels for

the following products: Room air

conditioners, furnaces, clothes washers,

dishwashers, water heaters, freezers,

refrigerators and refrigerator-freezers,

central air conditioners and central air

conditioning heat pumps and fluorescent

lamp ballasts. 44 FR 66475, November

19, 1979; 52 FR 46888, December 10, 1987;

and 54 FR 28031, July 5, 1989.

For each of 12 of the covered

products, the Act prescribes an initial

Federal energy conservation standard

(section 325(b)-(h)). The Act establishes

effective dates for the standards in 1988,

1990, 1992 or 1993, depending on the

product, and specifies that the standards

are to be reviewed by DOE within 3 to

10 years, also depending on the product

(Ibid.). After the specified 3- to 10-year

period, DOE may promulgate new

standards for each product; however,

the Secretary may not prescribe any

amended standard that increases the

maximum allowable energy use, or

decreases the minimum required energy

efficiency, of a covered product (section

325(l)(1)).

With regard to television sets, the Act

allows DOE to prescribe an applicable

standard; however, such standard may

not become effective before January 1,

1992 (section 325(i)(3)).

Nine products (room air conditioners,

water heaters, direct heating equipment,

mobile home furnaces, kitchen ranges

and ovens, television, sets, pool boaters,

clothes wasters, and fluorescent, lamp

ballasts) are the subject of this

rulemaking proceeding. For each of the

products, except television sets, clothes

washers, and mobile home furnaces, the

Act directs DOE to review each

legislated standard for possible

amendment and to issue final rules no

later than January 1, 1992, for units

manufactured after January 1, 1995.

For clothes washers, DOE is to issue a

final rule no later than five years after

the date of publication of the previous

final rule. As previously noted, on

August 9, 1989, DOE published a

proposed rule concerning standards for

three types of consumer products,

including clothes washers. (54 FR 32744).

A final rule for clothes washers is

expected to be published early next

year. However, subsequent to the

October 10, 1989, close of the comment

period on that proposed rule, DOE

became aware of a clothes washer

design option that has the potential of

saving significant amounts of energy

and water. Because this design option

(horizontal wash tub axis in top-loading

clothes washers) was not subject to

notice and comment in that rulemaking

proceeding, it cannot be considered in

the final rule. This rulemaking will

determine if it is economically justified.

For mobile home furnaces, DOE is to

issue a final rule no later than January 1,

1992, for units manufactured after

January 1, 1994.

Any new or amended standard is

required to be designed so as to achieve

the maximum improvement in energy

efficiency that is technologically

feasible and economically justified

(section 325(l)(2)(A)).

Section 325(1)(2)(B)(i) provides that

before DOE determines whether an

energy conservation standard is

economically justified, it must first

solicit comments on the proposed

standard. After reviewing comments on

the proposal, DOE must then determine

that the benefits of the standard exceed

its burdens, based, to the greatest extent

practicable, on a weighing of the

following seven factors:

(1) The economic impact of the

standard on the manufacturers and on

the consumers of the products subject to

such standard;

(2) The savings in operating costs

throughout the estimated average life of

the covered product in the type (or

class) compared any increase in the

price of, or in the initial charges for, or

maintenance expenses of the covered

products which are likely to result

directly from the imposition of the

standard;

39l25

(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.

Section 327 of the Act addresses the

effect of Federal rules concerning

testing, labeling, and standards on State

laws or regulations concerning such

matters. Generally, all such State laws

or regulations are superseded by the Act

(section 327(x)-(c)). Exceptions to this

general rule include the following: (1)

State standards prescribed or enacted

before January G, 1987, and applicable to

appliances produced before January 3,

1988, may remain in effect until the

applicable energy conservation standard

begins (section 327(b)(1)); (2) State

procurement standards which are more

stringent than the applicable Federal

standard (section 327 (b)(2) and (e)) and

certain building code requirements for

new construction, if certain criteria are

met, are exempt from Federal

preemption (sections 327 ('0)(3) and

(f)(1)--f(4)); (3) State regulations banning

constant burning pilot lights in pool

heaters; and (4) State standards for

television sets effective on or after

January 1, 1992, may remain in effect in

the absence of a Federal standard for

such products (sections 327 (b)(6) and

(c))•

The Act directs DOE to publish an

advance notice of proposed rulemaking

in advance of DOE consideration of

prescribing a new or amended standard.

b. Background

On December 7,1987, DOE published

such a notice with respect to

consideration of energy conservation

standards for television sets (52 FR

46363). (Hereafter referred to as the

December 1987 Notice).

On December 2,1988, DOE published

a notice of proposed rulemaking to

determine that an energy conservation

standard for television sets would not

be economically justified.

On November 17,1989, DOE published

a final rule which, inter alia, established

an energy conservation standard of 78

percent AFi.IE for small gas furnaces

and amended the standards for

refrigerators, refrigerator-freezers, and

 CE-RM-90-201 COMMENT 0A

•

55FR39624

Federal Register I Vol. 55, No. 189 I Friday, September 28, 1990 I Proposed Rules :asU1QQ& ,AAJliSZS llZE tBii ==ia:EZ#~... 1 !Zl$L4fOaih JMIIlIi W::«<.-PZ

39625 rHm

and pool heaters; as well as any other

consumer product classified by the

Secretary of Energy (Secretary) (section

322). To date, the Secretary has not so

classified any additional products.

Under the Act. the Program consists

essentially of three parts: Testing,

labeling, and mandatory energy

conservation standards. DOE, in

consultation with the National Institute

.of Standards and Teclmology (NIST), is

required to amend or establish new test

procedures as appropriate for each of

the covered products (section 323). The

purpose of the test procedures is to

provide for test results that reflect the

energy efficiency, energy use, or

estimated annual operating costs of

each of the covered products (section

323(b)(3]).

The Federal Trade Commission (FTC)

is required by the Act to prescribe rules

governiiJ.g the labeling of covered

products for which test procedures have

been prescribed by DOE (section

324(a}). These rules are to require that

each particular model of a covered

product bear a label that indicates its

annual operating cost and the range of

estimated annual operating costs for

other models of that product class

(section 324(c)(1»). At the present time

there are FTC rules requiring labels for

t1:Je following products: Room air

conditioners, furnaces, clothes washers.

dishwashers, water heaters. freezers,

refrigerators and refrigerator-freezers,

central air conditioners B.."1d central air

conditioning heat pumps and fluorescent

lamp ballasts. 44 FR 66475, November

19. 1979; 52 FR 46888. December 10, 1987;

and 54 FR 28031. July 5, 1989.

For each of 12 of the covered

products, the Act prescribes an initial

Federal energy conservation standard

(section 325(b)-(h)). The Act establishes

effective dates for the standards in 1938,

1990, 1992 or 1993, depending on the

product, and specifies that the standards are to be reviewed by DOE within 3 to

10 years, also depending on the product

(Ibid.). After the specified 3- to 10-year

period, DOE may promulgate new

.standards for each product; however.

the Secretary may not prescribe any

amended standard that increases the

maximum allowable energy use, or

decreases the minimum required energ'j

efficiency. of a covered product (section

325(1)(1)).

With regard to television sets, the Act

allows DOE to prescribe an applicable

standard; however, such standard may

not become effective before January 1,

1992 (section 325(i](3)).

Nine products (room air conditioners,

water heaters. direct hea,ting equipment,

mobile home furnaces, kitchen ranges

and ovens, television sets, pool h~aters,

clothes wasters, and fluorescent.lamp

ballasts) are the subject of this

ru!emaldng proceeding. For each of the

products, except television sets, clothes

washers, and mobile home flli1l8ces, the

Act directs DOE to review each

legislated standard for possible

amendment and to issue final rules no

later tr'lan January 1, 1992, for units

manufactured after January 1, 1995.

For clothes washers, DOE is to issue a

final rule no later than five years after

the date of publication of the previous

final rule. As previously noted, on

August 9, 1989, DOE published a proposed rule concerning standards for

three types of consumer products,

including clothes washers. (54 FR 32744).

A final rule for clothes washers is

expected to be published early next

year. However, subsequent to the

October 10, 1900, close of the cornment

period on that proposed rule. DOE

became aware of a clothes washer

design option that has the potential of

Baving significant amounts of energy

and water. Because t.i.is design option

(horizontal wash tub axis in top-loading

clothes washers) was not subject to

notice and comment in that rulemaking

proceeding, it cannot be considered in

t.~e final rule. This rulemakL'lg will

determine ifit is economically justified.

For mobile home furnaces, DOE is to

issue a final rule no later than January 1,

1992, for units manufactured after

January 1. 1994. .

Any new or amended standard is

required to be designed so as to achieve

the maximum improvement in energy

efficiency that is technologically

feasible and economically justified

(section 325(l)(2)(A».

Section 325(1)(2)(B)(i) provides that

before DOE determines whether an

energy conservation standard is

economically justified, it must first

solicit comments on the proposed

standard. After reviewing comments on

the proposal, DOE must then determine

that the benefits of the standard exceed

its burdens, based. to the greatest extent

practicable. on a weighing of the

following seven factors:

(1) The economic impact of the

standard on the manufacturers and on

the consumers of the products subject to

such standard;

(2) The savings in operating costs

throughout the estL'11ated average life of

the covered product in the type (or

class) compared any increase in the

price of, or in the initial charges for, or

maintenance expenses of the covered

products which are likely to result

directly 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) A:'ly 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.

Section 327 of the Act addresses the

effect of Federal rules concerning

testing. labeling, and standards on State

laws or regulations concerning such

. matters. Generally, all such State laws

or regulations are superseded by tile Act

(section S27(a)~{c)). Exceptions to this

general rule include the following: (1)

State standards prescribed or enacted

before January 9. 1987. and applicable to

appliances produced before Janual'"'j 3,

1988, may remain in effect UIltil the

applicable energy conservation standard

begins (section 327(b)(1)); (2) State

procurement standards which are more

stringent than the applicable Federal

standard (section 327 (b)(2) and (e») and

certain building code requirements fer

new construction, if certain criteria are

met, are exempt from Federal

preemption (sections 327 (b)(3) and

(fJ(1)-f(4»); (3) State regulations banning

constant burning pilot lights in pool

heaters; and (4) State standards for

television sets effective on or after

January 1,1992, may remain in effect in

the absence of a Federal standard for

such products (sections 327 (b)(6) and

(c)).

The Act directs DOE to publish an advance notice of proposed rulemaking

in advance of DOE consideration of

prescribing a new or amended standard.

h. Background

On December 7, 1987, DOE published

such a notice with respect to

consideration of energ-y conservation

standards for television sets (52 FR

46363). (Hereafter referred to as L~e

December 1987 Notice).

On December 2, 1988, DOE published

a notice of proposed rulemaking to

determine that an energy conservation

standard for television sets would not

be economically justified.

On November 17, 1989, DOE 'published

a final rule which, inter alia, established

an energy conservation standard of 78

percent AFUE for small gas furnaces

and amended the standards for

refrigerators, refrigerator-freezers, an.d
55FR39624

29626 Federal Register ,/ VoL 55, No. 189 / Friday, September 28, 1990 f Proposed Rules

freezers. (Hereafter referred to as the

November 1939 Final Rule ). At the same

time, DOE postponed action on a final

rule for television sets fora future

rulemaking :(54 FR 47916). The proposed

rulemaking will determine whether

conservation standards for television

sets are warranted.

This ANOPR is an advance notice for

a proposed fatal rule, which the Act

requires be published in the Federal

Register by January 1, 1992, for room air

conditioners, water heaters, direct

heating equipment, mobile home

furnaces, kitchen ranges and ovens, pool

heaters and fluorescent lamp ballasts.

The purpose of the rulemaking

proceeding is to review, for possible

amendment, the energy .conservation

standards for room air conditioners,

water -heaters, direct heating equipment,

mobile home furnaces, kitchen ranges

and ovens, pool heaters, and fluorescent

lamp ballasts that have been

established by the Act; to consider

amending :the energy conservation

standards for clothes washers; and to

consider energy conservation standards

for television sets.

II. Methodology

This section provides a brief

description of the analysis of the impact

of the standards. It offers an overview of

the analytic methodology, and discusses

the major components of the analysis:

the Engineering Analysis, the

Manufacturer Analysis, and the Impact

Analysis, which includes the Consumer

Analysis. The section also discusses the

interrelationships among the

components which ensure consistency

throughout the analysis.

A later discussion, Models, Data and

Assumption, describes the computer

models used in the analysis. The models

predict the anticipated response of

consumers, manufacturers, and utilities

to future changes in the economy,

including the imposition of energy

conservation standards. Quantitative

estimates of the impacts of standards

will be calculated from the outputs from

the models. The models that will be

utilized in the analysis are:

• Engineering Performance Models

• Consumer Impact Models

• Manufacturer Impact Models

Utility Impact Model

The function, data sources, assumptions

and validity of the results for each

model are discussed below.

The impact of appliance conservation

standards will be determined by

comparing projections under the base

case2 with the projections under the

proposed standards. These projections

.will.first be made for the base rase by

use of the analytic models described

below. The calculations will then be

repeated imposing the proposed

standard levels,

The differences between the

projections of the energy consumption

and economic variables in the base and

standards cases, respectively, provide

quantitative estimates of the impacts of

the standards. To evaluate the

significance of the differences, a

sensitivity analysis will be performed on

the key parameters and assumptions.

The economic analysis will be

performed in the following areas:

• An Engineering Analysis, which

establishes the technical feasibility and

product attributes, including costs of design

options to improve appliance efficiency.

Included in the analysis will be tolerances for

engineering assumptions which must be

made. These tolerances may be used in

establishing standard levels by setting the

efficiency at the lower end of the range

indicated when the tolerances are

considered.

• A Manufacturer Analysis, which

provides an estimate of manufacturers'

response(s) to the proposed standards. Their

responses are quantified by change in several

financial performance measures.

• A Consumer Analysis, which forecasts

appliance sales, efficiencies, energy use,

consumer expenditures, and the national net

benefits and costs.

• A separate Life-Cycle Cost Analysis to

evaluate the savings in operating expenses

relative to increases in purchase price.

A Utility Analysis that measures the

projected impacts of the altered energyconsumption patterns on electric utilities.

Each analysis area will be performed

for each of the nine products under

consideration. The results of the

Engineering Analysis will be reviewed

by DOE to determine whether standards

for each product could yield measurable

energy savings. If standards would not

yield energy savings-for example, if

there is no combination of design

options that would result in improved

product efficiency-the analysis will be

terminated. If energy savings are

possible, then a detailed analysis is

performed.

There is interaction among the

Engineering, Consumer, Utility and

Manufacturer Analyses. The

Engineering Analysis examines

appliance designs and related attributes

such as efficiency and costs. Based on

the relationships between the prices and

2 The base case assumes implementa tion of the

conssvation standards that were set by the Act as

to all covered products under consideration but

clothes washers, and by DOE role caking in the

case of clothes washers.

efficiencies of design options, the

Consumer Analysis forecasts sales,

efficiencies of design options, and

efficiencies of new and replacement

appliances. These data are used as

inputs to the.Manufacturer Analysis,

which uses them to determine the

financial impacts on prototypical firms

within the industry. The Consumer

Analysis forecasts energy savings and

consumer expenditures on the purchase

and operation of the appliances.

Consumer expenditures (both purchase

and operation) are employed in the LifeCycle Cost Analysis to determine

consumer impacts. Changes in sales,

revenues, investments, and marginal

costs of utilities are calculated from the

energy savings in the Utility Analysis.

Two periods of time are considered by

the analysis. First, the Consumer

Analysis extends over a time period that

is generally consistent with the lifetimes

of each of the products. Second. the

Manufacturer Analysis is performed for

a typical year after the standards are

assumed to have been imposed. The

typical year selected is the fifth, by

which time all major impacts of a

standard would have occurred. The

Engineering Analysis, however,

examines the technical feasibility of

improving the efficiency of the covered

products by analyzing design options

available today to improve product

efficiency, whether they are

commercially available or prototypes.

III. Models, Data and Assumptions

a. Engineering Performance Models and

Costing Analysis

The Engineering Analysis addresses

two statutory requirements. The first

requirement is DOE's evaluation of the

maximum improvements in energy

efficiency that are technologically

feasible. The second relates to the

lessening of utility to the consumer of

any of the covered products due to the

imposition of standards. In addition, the

Engineering Analysis provides

information on efficiencies.

manufacturing costs, and appliance

prices to other components of the

overall analysis.

The features of appliances that

provide utility to the consumer are

incorporated into the analysis through

the creation of appliance classes.

Classes are a subset of appliance types.

For example, kitchen ranges and ovens

comprise an appliance type, while selfcleaning gas ovens comprise an

appliance class. The Engineering

Analysis develops cost and efficiency

data for a set of design options v ttltin

each appliance class. These data are the

 CE-RM-90-201 COMMENT 0A

39626

55FR39624

Federal Register.l VoL 55. No. 189 / Friday. September 28, 1990 JProposed Rules

freezers. (Hereafter referred to liS the

November .1989 Final Rule). At the same

time. DOE poStponed action .on a fmal

rule for television sets for a future

rulemaking (54 FR 47916). The proposed

rulemaking will determine whether

conservation standards for television

sets are warranted.

This ANOPR is an advance notice for

a proposed final nue. which the Act

requires be published in the Federal

Register by January 1. 1992. for room air

conditioners, water heaters, direct

heating equipment. mebilehome

furnaces. kitchen ·ranges and ovens. pool

heaters and fluorescent lamp ballasts.

The purpose of the rulemaking

proceeding is to review, for possible

·amendment, the energy conservation

standards for room air conditioners,

water-heaters. direct heating equipment,

mobile home furnaces, kitchen ranges

and ovens. pool heaters, and fluorescent

lamp ballasts that have been

established by the Act; to consider

amending.the energy conservation

standards for clothes washers; and to

consider energy conservation standards

for television sets.

H. Methodology

This section nrovides a brief

description of the analysis of the impact

of the standards. It offers an overview of

the analytic methodology, and discusses

the major components of the analysis:

the Engineering Analysis. the

Manufacturer Analysis, and the Impact

Analysis, which includes the Consumer

Analysis. The section also discusses the

interrelationships among the

components wl'Jch ensure consistency

throughout the analysis.

A later discussion, Models, Data and

Assmnption. describes the computer

models used in the analysis. The models

predict the anticipated response of

consumers, manufacturers, and utilities

to future changes in the economy.

including the imposition of energy

conservation standards. Quantitative

estimates of the impacts of standards

wHl be calculated from the outputs from

the models. The models that ~.rH1 be

utilized in the analysis are:

• Engineering Perfoi'll1ance Models

• Consumer Impact Models

Manufacturer llnpact Models

• Utility Impact Model

The function, data sources, assumptions

and validity of t.l-Je results foi' each

,nodel are discussed below.

The impact of appliance conservation

standards wHl be determined by

<:omparing pn'iections under t.J,.e base

case2 'with ilieprojections under the

proposed standards. These projections

_will first be made .for the base -case by

use of the analytic models described

below. The calculations will then be

repeated imposing the proposed

standard levels.

The differences between the

projections of the energy consumption

and economic variables in the base and

standards cases, respectively, provide

quantitative estimates of the impacts of

the standards. To evaluate the

signTIicance ofthe differences. a

sensitivity analysis will be performed on

the key parameters and assumptions.

The economic analysis will be

performed in the following areas:

• An Engineering Analysis. -which

establishes the technical feaSibility and

product attributes. -including costs of design

options to improve appliance efficiency.

IIicluded in the analysis will be tolerances for

engineering assumptions which must be

made. Theae tolerances may be used in

establishing standard levels by setting the

efficiency at the lower end of the range

indicated when the tolerances are

considered.

-. 'A Manufacturer Analysis, which

provides an estimate ofmanufacturers'

response(s) to the proposed standards. Their

responses are quantified by change in several

financial performance measures.

• A Consumer Analysis, which forecasts

appliance sales, efficiencies, energy use,

consumer expenditures, and the national net

benefits and costs.

• A separate Life-Cycle Cost Analysis to

evaluate the savings in operating expenses

relalive to increases in purchase price. .. A Utility Analysis thai measures the

projected impacts of the altered energyconsumption patterns on electric utilities.

Each analysis area will be performed

for each of the nine products under

consideration. The results of the

Engineering Analysis v.rill be reviewed

by DOE to determine whether standards

for each product could yield measurable

energy savings. If standards would not

yield energy savings-for example, if

there is no combination of design

options that would result in improved

product efficiency-the analysis will be

terminated. If energy savings are

possible, then a detailed analysis is

performed. -

There is interaction among the

Engineering, Consumer. Utility and

Mallufacturer Analyses. The

Engineering Analysis examines

appliance designs and related attributes

ouch as efficiency and costs. Based on

the relationships between the prices and

• The base case assumes implements_lion of the

cODserlrancn standards that were set by the Ad as

to aU covered products urlder consideration but

clothes washers, and by DOE l"Jlemsking in the

case of dothes washers.

efficiencies'of design options, the

Consumer AnalysisJorecasts Jlales,

efficiencies of design options, and

efficiencies ofnew .and replacement

appliances, These data are used as

inputs to theManufacturer Analysis.

whichnses them :to determine the

financial impacts on prototypical firms

within the industry. The Consumer

Analysis forecasts energy savings and

,(;onsumerexpenditures on the purchase

and operation of the appliances.

Consumer expenditures (both purchase

and operation) are employed in the LifeCycle Cost Analysis to determine

consumer impacts. Changes in sales.

revenues, investments. and marginal

costs ofutilities are calculated from the

energy savings in the Utility Analysis.

Two periods of time are considered by

the analysis. First, the Consumer

Analysis extends over a time period that

is generally consistent wit.!"lthe lifetimes

of each of the products. Second. the

fvl:anufacturer Analysis is performed for

a typical year after the standards are

assumed to have been imposed. The

typical year selected is the fifLh, by

which time all major impacts of a

standard would have occurred. The

Engineering Analysis, however,

examines the technical feasibility of

improving the efficiency of the covered

products by analyzing design options

available today to improve product

efficiency, whether .they are

commercially available or prototypes.

III. Models. Data and Assumptions

a. Engineering Performqnce Models and

Costing Analysis

The Engineering Analysis addresses

two statutory requirements. The first

requtrement is DOE's evaluation of the

maximum L'11provements in energy

efficiency that are technologically

feasible. The second relates to the

lessening of utility to the consumer of

any of the covered products due to the

imposition of standards. In addition, the

Engineering Analysis provides

L'1formation on efficiencies.

manufacturing costs, and appliance

prices to other components of the

overall analysis.

The features of appliances that

provide utility to the consumer are

incorporated into the analysis through

t.~e creation of appliance classes.

Classes are a s11bBet of applianCE types.

For example, kitt::hen ranges and ovens

comprise an appliance type, while selfcleaning gas ovens comprise an

appliance class. The Engineering

Analysis develops cosi and efficiency

data for a sst of design options wiL."'lin _

each appliance class. The;;;:; data are the
55FR39624

Federal Register / Vol. 55, No. 189 / Friday, September 28, 1990 / Proposed Rules

output of the engineering performance

models and costing analysis discussed

in subsection 5-9, below.

1. Appliance classes

The first step in the Engineering

Analysis is to segregate product types

into separate classes to which different

energy conservation standards apply.

Classes are differentiated by the type of

energy use (oil, natural gas or

electricity), or capacity or performancerelated features that provide utility to

the consumer and affect efficiency.

Classes are differentiated in order to

ensure that consumer products having

different capacities or other

performance-related features affecting

efficiency and utility remain available to

consumers.

For each of the nine appliances, the

following are the classes that DOE

proposes to consider. DOE welcomes

comments, in response to this ANOPR,

on whether additional classes are

needed.

(1) Room Air Conditioners.

Without reverse cycle and with

louvered sides:

Less than 6,000 Btu

6,000 to 7,999 Btu

8,000 to 13,999 Btu

14,000 to 19,999 Btu

20,000 and more Btu

Without reverse cycle and without louvered

sides

less than 6,000 Btu

6,000 to 7,999 Btu

8,000 to 13,999 Btu

14,000 to 19,999 Btu

20,000 and more Btu

With reverse cycle and with louvered sides

With reverse cycle, without louvered sides

(ii) Water Heaters

Gas-fired (incl. propane) storage type water

heater

Electric resistance storage type water heaters

Oil-fired storage type water heaters

Electric heat pump water heaters

Gas instantaneous water heaters

Electric instantaneous water heaters

(iii) Direct Heating Equipment (Electric,

Gas and Oil Powered)

Wall

Fan Type

Up to 42,000 Btu/hour

Over 42,000 Btu/hour

Gravity type

Up to 10,000 Btu/hour

Over 10,000 Btu/hour up to 12,000 Btu/hour

Over 12,000 Btu/hour up to 15,000 Btu/hour

Over 15,000 Btu/hour up to 19,000 Btu/hour

Over 19,000 Btu/hour up to 27,000 Btu/hour

Over 27,000 Btu/hour up to 46,000 Btu/hour

Over 46,000 Btu/hour

Floor

Up to 37,000 Btu/hour

Over 37,000 Btu/hour

Room

Up to 18,000 Btu/hour

Over 18,000 Btu/hour up to 20,000 Btu/hour

Over 20,000 Btu/hour up to 27,000 Btu/hour

Over 27,000 Btu/hour up to 46,000 Btu/hour

Over 48,000 Btu/hour

(iv) Mobile Home Furnaces

Mobile Home Furnaces

(v) Television Sets

Color

Black and White

These classes are distinguished by

their ability or inability to reproduce

images in color, a performance-related

feature that affects utility and efficiency.

These classes are the same as proposed

in the December 1987 Notice. In the

November 1989 Final Rule, DOE

postponed action for television sets. The

information presented to DOE did not

substantiate any specific change to the

proposed classes. Absent further

information, DOE intends to consider

those classes proposed in the December

1987 Notice.

Because of the use of multiple electron

guns, color television sets usually

consume more energy than comparable

monochrome television sets, which use

only one electron gun. For this reason,

energy efficiency levels achieved by

monochrome television sets are not

achievable for color television sets.

Since color television sets and

monochrome television sets offer

distinct differences in utility to the

consumer, DOE is specifying separate

classes for color and monochrome

television sets.

(vi) Kitchen Ranges and Ovens

Microwave Oven Products Classes

Single Cavity-Microwave Only

Countertop, Built-in and Wall Ovens

Single Cavity-Microwave and

Thermal without Forced Air Movement

Countertop Ovens With Electric Thermal

Built-in and Wall Ovens With Electric

Thermal and Without Self-Clean

Built-in and Wall Ovens With Electric

Thermal and With Self-Clean

Built-in and Wall Ovens With Gas Thermal

and Without Self-Clean

Built-in and Wall Ovens With Gas Thermal

and With Self-Clean Free Standing, Drop-in

and Slide-in Ranges (with surface units)

With Electric Thermal and Without SelfClean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Electric Thermal

and With Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Gas Thermal and

Without Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Gas Thermal and

With Self-Clean

39627

Single Cavity-Mic ovt ave and

Thermal With Forced Air Movement

Countertop Ovens With Electric Thermal

Built-in and Wall Ovens With Electric

Thermal and Without Self-Clean

Built-in and Wall Ovens With Electric

Thermal and With Self-Clean

Built-in and Wall Ovens With Gas Thermal

and Without Self-Clean

Built-in and Wall Ovens With Gas Thermal

and With Self-Clean Free Standing, Drop-in

and Slide-in Ranges (with surface units)

With Electric Thermal and Without SelfClean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Electric Thermal

and With Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) with Gas Thermal and

Without Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Gas Thermal and

With Self-Clean

Range Product Classes

Electrical Top Section Using

Low or High Wattage Open Elements

Solid Disk Elements

Radiant Elements/Under Glass

Induction Elements

Halogen Elements/Under Glass

Grill-With Down Draft Feature

Griddle-With Down Draft Feature

Electric Ovens

Standard Electric Oven With or Without a

Catalytic Line Electric Oven-Self-Clean

Forced Convection Oven for Cooking

Forced Convection Oven for Cleaning

Halogen Lamp Oven

Steam Cooking With and Without Pressure

Gas Cooking Tops

Conventional Burner With Electrical Cord

Conventtonal Burner Without Electrical Cord

Sealed Burners

Radiant Burners

Gas Ovens

Standard Gas Oven With Cord (standard or

catalytic finish)

Standard Gas Oven Without Cord (standard

or catalytic finish)

Gas Self-Clean Oven

Radiant Burner Gas Oven

Gas Convection Standard Oven

Gas Convection Pyrolytic Oven

(vii) Pool Heaters

Pool Heaters

(viii) Fluorescent Lamp Ballasts

Ballasts designed to operate with:

One F40T12 lamp 120 volt

One F40T12 lamp 277 volt

Two F40T12 lamps 120 volt

Two F40T32 lamps 277 volt

Two FOT12 lamps 120 volt

Two F9T12 lamps 277 volt

Two F98T12HO lamps 120 volt

Two F96T12HO lamps 277 volt

(ix) Clothes Washers

Compact (less than 1.6 ft S)

Standard (1.6 ft 3 and greater)

 CE-RM-90-201 COMMENT 0A

55FR39624

Federal Register I Vol. 55, No. 139 I Friday, September 28, 1990 / Proposed Rules 39627 !ZElrwlP. ~Pit!:, xew" ));;a.as;r;~ S'1"~~~~~==i!.:S~_ .L ;::aa:::(~t....t .. am

output of the engineering performance

models and costing analysis discussed

Ln subsection 5-9, below.

1. Appliance classes

The first step i..1. t.l::e Engineering

Analysis is to segregate product types

into separate ciasses to which different

energy conservation standards apply.

Classes are differentiated by the type of

energy use (oil, natural gas or

electricity), or capacity or performancerelated features that provide utility to

the consumer and affect efficiency.

Classes are differentiated in order to

ensure that consumer products having

different capacities or other

performance-related features affecting

efficiency and utility remain available to

consumers.

For each of the nine appliances, the

follovnng are the classes that DOE

proposes to consider. DOE welcomes

camlnents, in response to this ANOPR,

on whether additional classes are

needed.

(i) Room Air Conditioners.

Without reverse cycle and with

louvered sides:

Less than 6,000 Btu

6.000 to 7,999 Btu

8.000 to 13,999 Btu

14.000 to 19.999 Btu

20.000 and more Btu

'Without reverse cycle and without louvered

sides

less than 6,000 Btu

6.000 to 7.999 Btu

8,000 to 13,999 Btu

14.000 to 19.999 Btu

20,WJ\) and more Btu

Wit.\ reverse cycle and with louvered sides

.With reverse cycle, without louvered sides

(ii) Water Heaters

Gas-fired (inc!. propane) storage pJPe water

heater

Electric resistance storage type water heaters

Oil-fired storage type water heaters

Electric heat pump water heaters

Gas instantaneous water heaters

Electric instantaneous water heaters

(iii) Direct Heating Equipment (Electric,

Gas and Oil Powered)

Wall

fan Type

Up to 42.000 Btu/hour

Over 42,000 Btu/hour

Gravity type

Up to 10.000 Btu/hour

Over 10.000 Btu/hour UIl to 12,000 Btu/hour

Over 12,000 Btu/hour up to 15,000 Btu/hour

Over 15,000 Btu/hour up to 19,000 Biu/hour

Over 19,000 Btu/hour up to 27,000 Btu/hour

Over 27,000 Btu/hour up to 46,000 Btu/hour

Over 46.000 Btu/hour

Floor

Up to 37,000 Btu/hour

Over 37,000 Btu/hour

Room

Up to 18,000 Btu/hour

Over 18,000 Btu/hour up to 20.000 Btu/hour

Over 20,000 Btu/hour up to 27,000 Btu/hour

Over 27,000 Btu/hour up to 46.000 Btu/hour

Over 46.000 Btu/hour

(iv) Mobile Home Furnaces

Mo1;Jile Home Furnaces

(v) Television Sets

Color

Black and White

These classes are distinguished by

their ability or inability to reproduce

images in color, a performance-related

feature that affects utility and efficiency.

These classes are the same as proposed

in the December 1987 Notic!,!. In the

November 1989 Final Rule. DOE

postponed action for television sets. The

L-normation presented to DOE did not

substantiate any specific change to the

proposed classes. Absent further

information, DOE intends to consider

those classes proposed in the December

1987 Notice.

Because of the use of multiple electron

g>ms, color television sets usually

consume more energy than comparable

monochrome television sets. which use

only one electron g>•.m. For this reason.

energy efficiency levels achieved by

monochrome television sets are not

achievable for color television sets.

Since color television sets and

monochrome television sets offer

distinct differences in utility to the

consumer, DOE is specifying separate

classes for color and monochrome

television sets.

(vi) Kitchen Ranges and Ovens

A1icrowave Oven Products Classes

Single Cavity-Microwave Only

c:.:ountertop, Built-in and Wall Ovens

Single Cavity-r.-iicrowave a.nd

Thermal without Forced Air Movement

Countertop Ovens With Electric Thermal

Built-in and Wall Ovens With Electric

Thermal and Without Self-Clean

Built-in and Wall Ovens With Electric

Thermal and With Self-Clean

Built-in and Wall Ovens Willi Gas Thermal

. and Without Self-Clean

Built-in and Wall Ovens With Gas Thermal

and With Self-Clean Free Standing. Drop-in

and Slide-in Ranges (with ilU1-{ace units)

With Electric Thermal and Without SelfClean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Electric Thermal

and With Self-Clean

Free Standing. Drop-in and Slide-in Ranges

(with surface units) With Gas Thermal and

Without Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Gas Thermal and

With Self-Clean

Single Cavity-~ficrowave and

Thermal With Forced Air Movement

Countertop Ovens With Electric Thermal

Built-in and Wall Ovens With Electric

Thermal and Without Self-Clean

Built-in and Wall Ovens With Electric

Thermal and With Self-Clean

Built-in and Wall Ovens With Gas Thermal

and Without Self-Clean

Built-in and Wall Ovens With Gas Thermal

and With Self-Clean Free Standing, Drop-in

and Slide-in Ranges (with surface units)

With Electric Thermal and Without SelfClean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Electric Thermal

and With Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) with Gas Thermal and

Without Self-Clean

Free Standing, Drop-in and Slide-in Ranges

(with surface units) With Gas Thermal and

With Self-Clean

Range Product Classes

Electrical Top Section Using

Low or High Wattage Open Elements

Solid Disk Elements

Radiant Elements/Under Glass

Induction Elements

Halogen Elements/Under Glass

Grill-With Down Draft Feature

Griddle-With Down Draft Feature

Electric Ovens

Standard Electric Oven With or Without a

Catalytic Line Electric Oven-5elf-Clean

Forced Convection Oven for Cooking

Forced Convection Oven for Cleaning

Halogen Lamp Oven

Steam Cooking With and Without Pressure

Gas Cooking Tops

Conventional Burner With Electrical Cord

Canventicnal Burner Without Electrical Cord

Sealed Burners

Radiant Burners

Gas Ovens

Standard Gas Oven With Cord (standard or

catalytic finish)

Standard Ges Oven Without Cord (standard

or catalytic fmish)

Gas Self-Clean Oven

Radiant Burner Gas Oven

Gas Convection Standard Oven

Gas Convection Pyrolytic Oven

(vii) Pool Heaters

Pool Healers

(viii) Fluorescent Lamp Ballasts

Ballasts designed to operate with:

One F40T12 lamp 120 volt

One F40T12 lamp 277 volt

Two F40T12 lamps 120 volt

Two F40T12 lamps 277 volt

Two F9T12 lamps 120 volt

Two F9T12 lamps 277 volt

Two F96T12HO lamps 120 volt

Two F96T12HO lamps 277 volt

(ix) Clothes Washers

Compact (less than 1.6 ft 3)

Standard (u} ft S and greater)
41628 Federal Register / -1

Semi-Automatic

Suds Saver

55FR39624

89 / Friday, September 28, 1990 / Proposed Rules r

. 55,

(i) Recta At Conditioners

(A) Increased Heal Transfer Surface A :ea

(B) Improved Fan and Fan Motor Efficiency

(C) Improved Compressor F.f<ciercy

(D) Variable Speed Compressors

(E) Alternative Refrigerants

(F) Electronic Expansion Valves

(G) Thermostatic Cyclic Controls

(ii) Water Heaters

(A) )acket Insulation

(B) Heat Traps

(C) Reduced Heat Leaks From Fittings

(u) Reduced Pilot Light Input Rate

(E) Automatic Ignition with a Flee Damper

(F) Elimination of Central Flue and Indirect

Heating of Water

(G) increased Flue Baffling with Forced Draft

(H) Multiple Flues

(1) Submerged Combustion Chamber

(T) Use of Pulsed Combustion

(k) Condensation of Flue Gases

for Heat pimp Water Heaters with a

Tank

(L) Increased Heat Exchanger Effectiveness

(M) Improved Compressor and Compressor

Motor Efficiencies

(i4) Improved Fan and Fan Motor Efficiencies

For Fleet Pump Water Heaters without

a Tarok

(0) Increased Heat Exchanger Effect; s•eness

for Evaporator and Condenser

(P) Improved Compressor and Compressor

Motor Efficiencies

(Q) Improved Fan and Fan Motor Efficiencies

(It) Improved Water Circulating Pump and

lump Motor Efficiencies

(S) Improved Heat Exchanger Insulation

(Ti Improved Connection Pose Insulation

For Instantaneous Water !!eaters

(U) Reduced Water in He :.ter After Each

Draw

(V) Reduced Pilot Light Input Rate

(W) Increased Flue Baffling wih, Forced Draft

(X) MAultiple Flues

(Y) Use of Pulsed Combustion and

Condensation

(iii) Direct Heating Equipment

(A) Increased Heat Exchanger Surface Area

(BI Intermittent Ignition Device and Vent

Damper

(C) Two-stage or Modulating Burner

(i3) In:p oven Blow er Motor Efficiency

(E) Power Burner or Induced Draft

(F) increased hnsulation

(C) Condensation of Flue Gases

(H) Pulsed Combustion

(iv) Mrsobile Home Furnaces

(A) Increased Heat ,,hanger Surface Area

(E) intermittent i ition Device and Vent

Damper

(C) Two-stage or Modulating Burner

(f3) Improved Blower lriotor Efficiency

() Power Burner or Induced Draft

(F) Increased Insulation

(G) Condensation of Flue Cases

tH) Pulsed Combustion

(•) Television Sets

(A) Remote Control

(B) Electronic Turning

2. Baseline Units

For the purposes of generating a cost/

efficiency relationship, the Engineering

Analysis needs to define a starting point

or baseline. The Engineering Analysis

uses information gathered from trade

organizations, manufacturers, and

consultants with expertise in specific

product types to determine a baseline

unit:. A baseline unit represents a typical

model within an appliance class sold

during the initial year of the analysis,

e.g., a unit that marginally complies with

the existing standard. Once identified,

each baseline unit is characterized by

its efficiency-related design options.

DOE requests data on specific units and

co, abinations of design options to be

considered as a baseline unit. In

addition, DOE requests comments on

any other factors to be considered in

selecting baseline units.

3. Design Options

The Engineering analysis will identify

an individual design option or

combinations of design options with a

potential for improving energy

efficiency. Design options that are

currently on the market, that are being

developed or that may be on the market

by the time standards are effective on

January 1, 199-5 {for mobile home

furnaces, January 1, 1954), will be

considered. Furthermore, DOE requests

comments on whether the existing test

procedures are appropriate for

measurhig product energy use and

efficiency and whether the test

procedure can evaluate a particular

design option's contribution to he

product's energy consumption. For

example, the current room air

conditioner test procedure , whLh

evaluates energy efficiency on a steady

state basic , would not provide credit for

design options such as variable speed

compressors or electronic expansion

valves since both of these designs

improve the unit's cyclical performance.

Similarly, DOE's iricrowave oven test

procedures are based on Interna tional

Electrotechnical Conupission (IEC)

Standard 705 (197 5). It is DOE'S

understanding that this standard was

amended by industry it 1958 because

manufacturers were experiencing a

number of problems conducting the `r,.ast.

To date, DOE has not adopted the new

standard and invites comments as to

whether it should.

DOE requests comments on bout the

DOE design options listed below and the

auplicability of the extant test

procedure. The following is a list of

design options that will be examined:

(CI Automatic Color Co nttral

(B) Vertical Interval Reference

(F) Brightness Sensor

(F) Voltage Regulating Power Source

(G) Display Device

(H) One-Gun Tube

(vi) Kitchen Ranges and Ovens

For Gas Cook-tops

(A) Thermostatically Controlled Gas Burners

(B) Insulation/Reflective Surface

For Electric Cooktops

(C) Improved Contact Conductance

(l1) i su?ation,/Refiect.hm Surface

For Ovens (Gas, Electric and

Ivli r wave)

(E) Improved Insulation of the Cabinet

Envelope

(F) Reduced Vent Size

(G) Reduced Conduction Losses

(H) Insulation with Lower Conductivities

(I) Use of R efectivre Surfaces

(j) Reduction of Thermal Mass

(K) Forced Convection During Cleaning

(L) Oven Separator (allowing the user to

reduce oven volume when possible)

(lvi) Improved Magnetrons

(vii) Pool Heaters

(A) Reduced Pilot Light Input Rate

(B) Automatic Ignition with a Flue Dar. per

(C) Elimination of Central Flue and Indirect

Heating of Water

(D) Lncreased Flue Baffling with Forced -;raft

(E) Multiple Flues

(P, Submerged combustion Chambei

(G) Use of Pulsed Combustion

(H) Condensation of Flue Gases

(viii) Fluorescent Lamp Ballasts

(A) Use of Copper Wire in Coils

(Bl Steal Core

(C) High Frequency Operation (electronic

ballasts)

(ix) Clothes Washers

(A) Thermostatically Controlled Mixing

Valves

(B) Plastic Tubs

(C) Horizontal Axis of Wash Tub

4. Maximum Technologically Feasible

Designs

The Act requires that, in considering

any new or amended standards, DOE

must consider those that "shall be

designed to achieve the maximum

improvement in energy efficiency which

the Secretary determines is

technologically feasible and

economically justified." (section 325

(111(2](A)'). Accordingly, for each class of

product that is under consideraion in

this rulemaking a maximum

technologically feasible level will be

identified. The maximum

technologically feasible level is one that

can be carried out by the addition of

design options, both commercially

feasible and prototypical, to the baseline

units without affecting the product's

 CE-RM-90-201 COMMENT 0A

55FR39624

:.m823 Federal Register I Vol. 55, No. 189 / Friday, September ZB, 1990 I Proposed Rules .....a Ai;;a{, lZCU = J ~~",..::a::;;;w:x;"i4 W~J2!!l:geC%:;;;;:n&A\:S ~Ji:It\tI!l;t"'.~A.un::!Cttzu::: &~::5i3iJ;;;JO;~~

Semi-Automatic

Suds Sovel'

2. Baseline U:n.ita

For the purposes of generating a cost/

efficiency relationship. the Engineering

Analysis needs to define a starting point

or bas<,;1ine. The Engineering Analysis

uses information gathered from trade

organizations. manufacturers, fu"ld

consilltants with expertise in specific

product types to determine a basebl.e

u..'1it. A baseline unit represents a typical

model within an appliance clasl> sold

during the initial year of h'18 analysis,

e,g" a unit that marginally complies with

the existing standard. Once identified,

each baseline un.it is characterized by

lIs efficiency-related design options.

DOE requests data on specific units and

oombinations of design options to be

considered ail a baseline llilit. In

addition. DOE requests comments on

any other factors to be considered in

selecting baseline units.

3. Design Options

The Engineering analysiil will identify

fin individual design option or

combinations ofdesign options with a

potential for improving energy

efficiency. Design options that are

cunently on the market. that are being

deveioped Dr that may be on the market

by the time standards I.[~e effective on

Januar,}' 1, 1995 {for mobile hOl.11e

furnaces. January 1. 1994), wi!! be

considered. Furthermore, DOE requests

comments {)n whether the existing test

procedures are appropriate for

measuring product energy use and

efficiency and whether the test

procedure can evaluate a particular

design option's contribution to (h.e

product's energy consumption. For

example, the current room air

conditioner test procedure, which

evaluates energy efficienc:!, en a steady

state basis, would not provide Gredit fm

design options such as'variable speed

compressors or electronic expansion

valves since both {If these designs

improve the unit's cyclical performance,

Similarly, DOE's microwave even test

procedures are based on International

Electrotechnice.l ComJ)lission (IEG)

Standard 705 (1975). It is DOE'il

understanding that this standard was

amended by industry in 19Ba t.ecau.se

manufacturers were experiencing .a

number of problems conducting the t:;8t.

To date. DOE has not adopted the new

standard and invites comments as to

whether it &hould.

DOE requests comments en both the

DOE design options listed below and the

applicability of the extant test

procedure. The following is a .lil?it of

design options that wlll be examined:

{i) Room Air Conditioners

(AJ increased Haat Transfer Surface Area

(Bi Iml}I'oved Fan Elud Fan tvlotor Efficiency

(C) Improved Compressor Efficiency

(Dj Vcriable Speed Compressors

(E) Alternative Refrigerants

(F) Electronic Expansion Valves

(G) Thermostatic Cyclic Controls

(il) Water Heaters

(A) jacket Insulation

(B) Heat Traps

(C) Reduced Heat Leaks From Fittings

(D) Reduced Pilot Light Input Rate

(E) Automatic Ignition "...lith a flue Damper

(F) ElirrJnation of Central Flue and Indirect

Heating afWater

(G) increased Flue Baffling ·wit.l). Farced Draf1

(Hj Multiple Plues

(I) Submerged Combusti-on Chamber

(]JUse Df Pulsed Contbustion

(K) Ccndem:ation d Fiue Gases

For Heat Pu.mp Water Heaters with a

Tank

(L) lnlFeased Heat Excharrger Effectiveness

[M) lmpJ'oved Compressor &'10 Compressor

Motor Efficiencies

(f"l Improved Fan and Fan MDiorEfficiencies

For Heat PUInp Water Heaters without

a Tank

(0) Increased Heat Exchanger EffectiYen~ss

for E,'aporator and Condenser

(P) Improved Compressor and CompressQr

MotorEffiDfencies

(Qj Improved Fan and Pan :Motor Efficiencies

(R) Improved Water Circulating Pump "nd

Pump Motor Efficiencies

(S) lmproved Heat Exchanger Insulation

(T) Improved Connection Hose Insulation

For Instantaneous VtTater Heaters

(U) Reduced Water in Heater After Each

Draw fin Reduced Pilot Light Input Rate

(W) Increased Flue Baffling with. Forced Drart

(X) !v!ultiple Flues

(Y) Use of Pulsed Combustion a:1d

Condensation

(iii) Direct Heating Eqillpment

(A) Increased Heat Exchanger Surface Area

iB) Ir"ermitt"nt Ignition Device and Vent

Damper

(C) Two-stage or Modu.lal!ng Btil'nar

(D) Improved Blower Motor Efficiency

(Ei Power BU1TIer or Induced Draft

(F) 1,creased 1..sulation

(G) Condensation of Flu? Gases

{Hi Pulsed Combustion

(iv) M:obile Home Fmnaces

(A) Increased Heat FJwhanger Surface Area

(Bl Intermittent Ignition Device and "ilent

Damper

(C) Two-stage or Modulating Burner

(D) Improved Blower.Motor Efficiency

(E) Fewer Burner 01' Induced Draft

(F) Increased Insulation

{G} Condensation offlue Gases

(Ii) Pulsed Combustion

('If) Television Sets

(A) Remote Control

iEl) Electronic Tuning

(C} Automatic Color Control

(D) Vertical Interval Reference

IE) Brightness Sensor

(F) Vollage Regulating Power SOlIrce

(G) Display Device

(H) One-Gun Tube

('\.i) Kitchen Ranges and Ovens

FOT Gas Cooktops

tAJ Thennostatically Controlled. Gas Bill'llcrs

fE} Insulation/Reflective Surface

For Electric Cooktops

(GJ Impro..-ed Contact Conductance

CD) L~sulat~on/Reflective Smface

Fol' Ovens (Gas. Electric and

Micr,}wsve)

(Ej lmproved Insulation of the Cabinet

Envelope

(Fj Reduced Vent Size

(G) Reduced Conduction Looses

fHJ lmmlation withLcwer Conduciivities

(I) Use of Reflective Surlaceil

(J) R"duction ofThermal Mass

[K} For<::ed Convection During Cleaning

(L) Oven Separator (alloiAing the user to

reduce oven volume when possible)

eM) Improved Magnetrons

(vii) .P<:>ol Heat"rs

fA) Reduced Pilot Light Input Rate

(B) Automatic Ignition with H Flue Dampar

(C) Elimination of Central Flue and.lndirect

11eatmg ofvVater

(D) LTJ.creasp.d Flue Baffling with Forced Draft

(Ej Multiple Flues

(F) Submerged CombuatloI! Chamber

(G) Use of Pulsed Combustion

(H) Condensation of Flue Gases

(viii) Fluorescent Lamp Ballasts

fA) Use of Copper Wire in Coils

(EJ Steel Core

(C) High Frequency Operation (electronic

ballasts]

(ix) Clothes Washers

(A) Thermostatically Controlled Mixing

Valves

IB) Plastic Tubs

(C) Horizontal bis of Wash Tub

4. Iviaximu.m.Technologically Feasible

Designs

The Act requires that, in considering

any new or amended standards, DOE

must consider those that "shall be

designed to achieve the maximum

improvement in energy efficiency w hieh

tne Secretary determines is

technologically feasible and

economically justified." (section 325

(1}(2)(A)). According!y, for each class of

product that iil under -consideration in

this rulemaking, a maximum

technologically feasible level .'Vill be

identified, The maximum

technoiogicaHy feasible lavel is one that

can be carried out by the addition of

design options. both commercially

feasible and prototypical. to the baseline

units without affecting the product's
55FR39624

Federal Register / Vol. 55, No. 189 / Friday, Septembe

utility. DOE believes that the maximum

technologically feasible level must be

capable of being assembled, but not

necessarily manufactured, by the

effective date of a standard. In other

words, a design must exist in at least a

prototype form to be considered

maximum technologically feasible.

5. Performance models

In the engineering analysis, DOE's

estimate of the efficiency of various

design options, and combination of

design options, will be based on either

computer simulation models or

experimental data based on the DOE

test procedures. DOE requests test data

on the efficiency of the various design

options and information on possible

simulation models for use in this

rulemaking. When test data or

simulation models are not available,

DOE may attempt to characterize the

energy use differences of design options

from existing appliances such as by

measuring the wattage of televisions

sets available at retail outlets with

different features.

6. Costing analysis

Manufacturer cost data for baseline

units and incremental costs for design

iniprotements are requested. The cost

data requested include, for each design

option, incremental cost data .r

disaggregated into labor, purchased

parts, materials, shipping/packaging and

tooling.

7. Price-efficiency relationships

The results of the Engineering

Analysis are summarized in the costefficiency relationships that show the

efficiency, unit energy consumption, and

manufacturer cost of each design option

and combination of design options, for

each appliance class. Manufacturer and

dealer markups are applied to the

manufacturing costs to determine the

purchase price of the appliance. The

price-efficiency relationships are a

fundamental input to the Consumer

Analysis.

5, Data sources

Shipments data, costs of purchased

materials and parts and engineering and

labor cost data will be based on

available information, including

information received in comments on

this ANOPR and from that collected

from industry sources.

9. Outputs from the Engineering,

Analysis

For each combination of design

options considered, the models and data

provide:

28, 1990 / Proposed Rules

Energy efficiency (expressed as the

DOE energy factor) a;

Annual energy consumption per unit

(based on DOE test procedures);

Increased material, purchased parts,

labor, and investment costs for small

and large manufacturers by product

class;

a The relationship between price and

efficiency level by product class; and

Other information on product

characteristics, such as maintenance

costs.

b..LBL Residentiol EnergyModel (LBLRENI)

Early energy demand modeling

focused on engineering estimates or on

the relationship between energy

consumption and economic growth. In

the 1970's, Oak Ridge National

Laboratory (ORNL) developed the first

model to integrate these two important

aspects, the Engineering-Economic

Model of Residential Energy Use (ORNL

Model). That model was brought to

Lawrence Berkeley Laboratory (ILL in

1979 and adapted to the analysis of

Federal appliance efficiency standards.

The ORNL Model has been updated by

LBL, resulting in the LBL Residential

Energy Model (LBL-REM) which is

summarized below.

The LEI-REM forecasts the appliance

purchase choices that households make,

as well as their subsequent appliance

usage behavior and energy consumption.

The model uses engineering estimates of

the characteristics of particular designs

of appliances, and calculates the

national impacts of a technologyspecific policy on the populations of

appliances used in the households, The

engineering data provide alternative

designs, characterized by purchase price

and efficiency, that are available for

purchase, The output from TBI-REM

pro<v-ides estimates of energy savings

and consumer economic impacts

(operating expenses and life-cycle

costs).

Engineering, economic, and

demographic data are used in the LBLREM. The engineering data for

appliances include the price-efficiency

relationships described above.

Additional data include information

regarding alternative building shell

S The energy factor is a measurement of energy

efficiency derived from the DOE test procedure for

that product.

{ As was the case with previous analyses. small

manufacturers will not be analyzed separately. No

general manufacturing approach could be identified

for these firms because of the wide variability in

their approach to manufacturing. Therefore, small

manufacturers costs have been assumed to equal

those of medium manufacturers. DOE encourages

small manufacturers to submit data.

construction measures and costs, unit

energy consumption and efficiency of

existing appliances, age distribution of

existing appliance stock, and retirement

functions. Economic data includes

projected energy prices 5 and household

hico me, and models of energy

investment, appliance purchase and

usage behavior, including fuel and

teclinology choice for each end-use.

Demographic data includes number of

households by pe, projected housing

starts and demolitions, and initial

appliance holdings.

1. Structure of the Model

The LEL-REM segments annual

energy consumption into house types,

end-uses, and fuel types. The house

types are single family, multifamily, and

mobile homes. Calculations are

performed separately for existing and

new housing construction each year

over the period, 1980-2015. The end-uses

are space heating (including room and

central), air conditioning (room, central

conventional, and heat pump), water

heating, refrigeration, cooking, clothes

drying, lighting, clothes washing,

dishwashing, and miscellaneous. Up to

four fuels are considered, as appropriate

to each end use. electricity, natural gas,

heating oil, and LPG. The models exists

in two versions: national (one region),

and regional (10 Federal regions). For

those appliances whose usage is not

likely to differ by geographic location,

i.e., clothes washers, kitchen ranges and

ovens, fluorescent lamp ballasts and

television sets, the national version will

be utilized in this analysis. For room air

conditioners, water heaters, pool

heaters, mobile home furnaces, and

direct heating equipment, DOE will use

the regional model (as data allow). DOE

requests comments on regional usage on

each of the appliances considered in this

ANOPR.

The model projects five types of

activities: technology/fuel choice;

building shell thermal integrity choice;

appliance efficiency choice; usage

behavior; and turnover of buildings and

appliances.

2. Housing Stock Submodel

This submodel prepares data about

housing stock projections for the LBLRElv1. The number of occupied

households, by type, is taken from the

1980 Censuses of population and

Housing. An exogenous projection for

housing starts is obtained and estimates

The projections of energy prices will be taken

from the rrost recent Mutual Energy Outlook, a

publication of DOE's Energy Lformation

Administration,

 CE-RM-90-201 COMMENT 0A

55FR39624

~-

Federal Register I Vol. 55, No. 189 I Friday, September 28, 1990 I Proposed Rules .~ ::::asa:;.~,)(IO>; ,::eE¥!IEi"~:S1IQ"Z45 . ...,...m3W}"''**'*.. g: ,*$ 2tTM'Wi~"5P',GIl'tMl:t:tiU'5ms~4!~.... ,..

39629

utility. DOE believes that tha maXh'TIllr.l1

tecrJlologically feasible level fillst be

capable of being assembled, but not

necessarily manufactured, by the

effective date of a standard. In other

'words, a design must exist in at least a

prototype form to be considered

maximum tecpJlologically feasible.

5. Performance models

In the engineering analysis, DOE's

estimate of the efficiency of various

design options, and combination of

design options, win be based on eiLher

computer simulation models or

experimental data based on the DOE

test procedures. DOE requests test data

on the efficiency of the various design

options and information on possible

simulation models for use in this

rulemaking. When test data or

simulation models are not available,

DOE may attempt to characterize the

energy use differences of design options

from existing appliances such as by

measuring the wattage of televisions

sets available at retail outlets with

different features.

0, Costing analysis

Manufacturer cost data for baseline

units and incremental costs for design

improvements are requested. The cost

data requested include, for each design

option. incremental cost data .,

disaggregated into labor, purchased

parts, materials, shipping/packaging and

tooling.

7. Price-efficiency relationships

The results of !he Engineering

Analysis are summarized in the costeffieiency relationships that show the

efficiency, unit energy consumption. and

manufacturer cost of each design option

and combination of design options, for

each appliance class. Manufacturer and

dealer markups are applied to the

manufacturing costs to deterrrJne the

purchase price of the appliance. The

price-efficiency relationships are a

fundamental input to the Consumer

Analysis.

a. Data sources

Shipments data, costs of purchased

materials and parts and engineering and

labor cost data will be based on

available information, including

information received h'1 comments on

this ANOPR and from that collected

from industri sources.

9. Outputs from the Engineering

Analysis

For each combination of design

options considered. the models and data

provide:

.. Energ'j efficiency (expressed as the

DOE energy factor) 3;

" Annual energ"j consumption per upit

{based on DOE test procedures);

.. Increased material, purchased parts.

labor, and investment costs for small .4

and large manufacturers by product

.class;

" The relationship between price and

,efficiency level by product class; and

'" Other L'1formation on product

characteristics, such as maintenance

costs.

b. LBL Residential Energy ]'''Iodel (LBLREM)

Early energy demand modeling

focused on engineering estiniates or on

the relationship between energy

consumption and economic growth. In

the 1970's, Oak Ridge National

Laboratory (ORl'.'L) developed the first

model to integrate these two important

aspects, the Engineerl~'1g-Economic

Model ofResidential Energy Use (ORf\.'L

Model), That model was brought to

Lawrence Berkeley Laboratory (LEL) in

1979 and adapted to the analysis of

Federal appliance efficiency standards.

The ORN"L Model has been updated by

LEL, resullli'1g in. t.he LEL Residential

Energy Model (LBL-REM] which is

summarized below.

The LBL-RR\i forecasts ,the applia.nce

purchase choices that households make,

as well as their subsequent appliance

usage behavior and energy commmption.

The model uses engineerillg estimates of

the characteristics of particular designs

of appliances, and calculates the

national impacts of a technologysPllcific policy on the populations of

appliances used in the households. The

engineering data provide alternative

designs, characterized by purchase price

and efficiencv, that are available for

purchase. The output from LBL-REM

proVides estimates of energy savings

and consumer economic impacts

(operating expenses and life-cycle

costs).

Engineering, economic. and

demographic data are used in the LBLREM. The engineering data for

appliances include lhe price-efficiency

relationships described above.

Additional data include information

regarding alternative building shell

:I The en€,rgyfactor is a meaSli...T't?ment of energy

efficiency derived from the DOE test procedure for

tha1product.

• As was the caae with previous analyses. small

malmfaclurers will nol be analyzed separately. No

general manufacturing approach could be identified

for these firms because of the wide variability in

their approach to manufacturing. Therefore. small

manufacturers costs have been assumed to equal

those of medium manufacturers. DOE encourages

small manufacturers to submit data.

construction measures and costs, unit

energy consumption and efficiem;y of

existing appliances. age distribution of

existing appliance Btock, and retirement

function!!. Economic data includes

projected energy prices 5 and household

Li1came, and models of energy

investment, appliance purchase and

usage behavior, incbding fuel and

tedmolo["y choice for ee.ch end-use.

Demographic data includes number of

households by type, projectedhoasing

starts and demolition::;, and initial

appliance holdiags;

1. Structure of the Model

The LEL-REM segmetits annual

energy COnSUi'llption LTlto house types,

end-uses, and fuel rjpes. The house

types are single family, IDultifalJlJly, and

mobile homes, Calculations are

performed separately for existing and

new housing construction each year

over the period, 1980-2015. The end-uses

are space heating (including room and

central), air conditioning (room, central

conventional, and heat pump), water

heating, refrigeration, cooking, clothes

drying, lighting, dothes washing,

dishwashing, and miscellaneous. Up to

fOUf fuels are considered, as appropriate

to each end use: eltdricity, natural gas,

heating oil, and LPG. The models exists

in two versions: national (one region),

and regional (10 Federal regions). For

those appliances whose usage is not

likely to differ by geographic location,

i,e., clothes y./ashers, kitchen ranges and

ovens, fluorescent le.mp ballasts and

television sets, the national version will

be utilized b this analysis. For room air

conditioners, water heaters, pool

heaters, mobile home furnaces, and

direct heating equipment, DOE will use

the regional model (as data allow]. DOE

requests comments on regional usage on

each of the alJDliances considered in this

/;NOPR. '.'

The model projects five types of

activities: technologYifuel choice;

buiJdLllg shell thermal integrity choice;

appliance efficiency choice; usage

behavior; and turnover of buildings and

appliances.

2. Housing Slock Submodal

This submodel prepares data about

housing stock projections for the LEI.-

REM. The number of occup:ed

households. by type, is taken from the

1980 Censuses of Population and

Housing. An exogenous projection for

housing starts is obtained aIld estimates

• The projections of energy pricee "'ill be taken

from the 11:os1 recent ~'1I!uaJE:'Jergy Outlook. a

publication of DOE's Energy Informa tion

AdmiJ'd51ration.
55FR39624

39630 Federal Register / Vol. 65, No. 189 / Friday, September 28, 1990 / Proposed Rules

of projected demolition rates by house

type are calculated, assuming an

exponential function. The housing

submodel determines the projected

housing stock each year, 1981-2020, by

subtracting demolitions from existing

stock, then adding starts. The annual

demolition rates by house type will be

calculated for single family, multifamily,

and mobile homes, respectively.

3. Efficiency Choice Algorithm

Historical efficiency data are

available for selected years for each

class of appliance through at least 1987.

The Federal energy conservation

standards for new units of these

appliances are expected to be met by

the effective date of the standard. After

that date, future efficiency

improvements are assumed to be a

function of designs available (according

to the engineering analysis) and of

relevant energy prices. DOE believes the

forecasting algorithm is designed to

allow annual average efficiency or

shipment-weighted efficiency factors

(SVNEFs) to increase if either more

efficient designs become available at

lower prices, or energy prices increase.

Conversely, if energy prices decrease,

the SWEF may decline, but would have

a lower bound at the 1990 Federal

standard level.

4. Thermal Integrity

The projection of the level of

investment in thermal integrity

measures in new houses is based on a

life-cycle cost calculation, analogous to

that done for equipment efficiencies."

Estimates of the incremental costs of

thermal integrity measures are used in

conjunction with current fuel prices and

a discount rate. Estimates of

investments in thermal integrity retrofits

of existing houses are projected as a

function of income and household

energy expenditures.7

5. Modeling Efficiency Standards

The LBL-REM projects the average

efficiency of new products-for

example, water heaters-purchased

each year, in the absence of additional

Federal regulations. A distribution of

efficiencies is constructed around the

average, based on efficiency

distributions observed in the

marketplace. This information includes

6 The equipment efficiency and thermal integrity

decisions are not solved simultaneously, but

recursively. For each year analyzed, equipment

efficiency is projected and then these results are

used to calculate investments in thermal integrity.

° Based on E. Hirst, It. Goreltz, and H. Manning,

Analysis of Household Retrofit Expenditures,

Energy Systems and Policy, vol. 7, No. 4. pages 303-

322 (1983).

information from industry sources and

published data from the industry trade

associations. A new Federal standard

level eliminates part of the distribution;

therefore, a new distribution is

constructed. The new shipmentweighted average efficiency then

characterizes the efficiency of new units

in that year. The same process is

applied to all years after implementation

of the standard. The model is then run

again for the standards case, with the

adjusted average efficiencies, to

calculate any changes in market shares,

usage behavior, or investment in

building shell thermal improvements

that may occur as a result of standards,

and to calculate the net energy savings.

6. Turnover of Appliance Stocks

The initial age distribution of

appliances in stock is characterized

based on industry data about historical

annual shipments. The fraction of each

product that retires each year is based

on the number of years since purchase

of the product. For each year's purchase

the model associates an average

efficiency, so that when older

appliances are retired, they are also

recognized as less efficient."

The number of potential purchasers of

an appliance in new homes is equal to

the number of new homes constructed

each year. The number of potential

purchasers of appliances in existing

houses is equal to the number of retiring

appliances, plus a fraction of those

households that did not previously own

the product,

7. Calculation of Market Shares

Potential purchasers may purchase

any competing technology within an

end-use, or none. For each end-use,

long-term market share elasticities are

estimated with respect to equipment

price, operating expense, and income,

respectively. The effect of standards is

expected to be lower operating expense

and increased equipment price. The

percentage changes in these quantities

are used, together with market share

elasticities, to determine changes in

market share resulting from standards.

The model assumes that higher

equipment prices will decrease sales

volumes, while lower operating

expenses will increase them, The net

result (predicted market share) depends

on the standard level selected, with its

associated equipment prices and

operating expenses.

• See Consumer Products Efficiency Standards

Economic Analysis Document, DOEjCE-0029,

March 1982, pp. 412-13.

8. Usage Behavior

For some products, i.e., room air

conditioners, water heaters, direct

heating equipment, mobile home

furnaces, and pool heaters, changing the

operating expense results in changes in

usage behavior. These changes are

modeled based on usage elasticities in

operating expense and income. For

kitchen ranges and ovens, clothes

washers, fluorescent lamp ballasts, and

television sets, these elasticities are

expected to be at or near zero; usage

behavior is not influenced by the

expense of operating the appliance. DOE

will appreciate any comments on this

assumption.

9. Energy Consumption Calculations

The total energy consumption per

house for each end-use and fuel by

house type and vintage (existing or new)

is the product of the unit energy

consumption (accounting for efficiency

and capacity changes), and usage factor,

e.g., relative hours of operation for room

air conditioning. The corresponding

annual energy consumption for all

households is the annual consumption

per household times the number of

households of that type and vintage,

times the fraction of-those households

owning that appliance.

Aggregate energy consumption is

obtained by summing intermediate

results, For example, national electricity

consumption for room air conditioners

in a particular year is the sum across

house types and house vintages of

electricity used by room air

conditioners. National `residential

electricity consumption in that year is

the sum of all end-uses of electricity

consumption in the residential sector.

10. Model Outputs

The principal outputs from the LBLREM for each year are:

• Energy consumption by end-use and

fuel.

• Total residential energy

consumption by fuel.

• Per unit equipment price and

operating expense by product.

• Projected annual shipments of

residential appliances.

• Differences in these quantities

between a base and a standards case.

These outputs are provided annually

(or for selected years) and cumulatively

over a period of time, e.g., 1995-2020.

Energy savings are provided annually

from implementation of standards to the

end of the period. Net present value of

standards is evaluated for each

regulated product, and for the end-use(s)

comprising the regulated and competing

products.

 CE-RM-90-201 COMMENT 0A

55FR39624

• See Consumer Products Efficiency Standards

Economic Analysis Document DOEiCE-0029.

March 1982, pp. 412-13.

• The equipment efficiency and thermal integrity

decisions ere nol solved simultaneously, but

recursively. For each year analyzed, equipment

effjciency is projected and then Ihese results are

used to calculate investments in thermal integrity.

7 Based on E, Hirst, R. Goreltz, and H. Manning,

Analysis of Household Retrofit Expenditures.

Energy Systems andPolicy. Vol. 7, No.4. pages 303- 322 (1983),

39330 Federal Register I Vol. 55, No. 189 I Friday, September 28, 1990 I Proposed Rules umr .,.?U7f"P'ttti , a m: rr::wr ..." .t::ws7JSZM~...."... Z ~L i • p,,~ of :AMiill'&4!tJ9I ~:was k

of projected demolition rates by house information from industry source& and 8. Usage Behavior

type are calculated. assuming an published data from the indusITy trade

exponential function. The housing assopiations, A new Federal standard For some products. i.e., room air

b d 1d t . th . d conditioners. water heaters. direct su mo e e ernnnes e projecte level eliminates part of the distribution; housing atock each year. 1981-2020. by therefore, a new distribution is heating equipment. mobile home

subtracting dem l

'ti fr . t' furnaces. and pool heaters, changmg' the 01 ons om eXIs mg constructed. The new shipment- S"ock then add' t t Th 1 operating expense results in changes in L. mg a ar s. e annua weighted average efficiency then

demoliti . t b h typ ill b usage behavior. These changes are on ra es youse ewe characteri..zes the efficiency of new units

Ie 1 t d . I f'l 1 'f i1 modeled based on usage elasticities in

eR U_E. e lor smg e .amI y. mn ti am Y. in that year. The same process is ~nd m b'l h t' 1 operating expense and income. For "'- 0 I-<! ames, respec Ive y. applied to all years after implementati'on kitchen ranges and ovens, clothes

3. Efficiency Choice Algorithm ofthe standard. The model is then run washers, fluorescent lamp ballasts, and

Historical efficiency data are again for the standards case. \l\'ith the television sets. these elasticities are

available for selected years for each adjusted average efficiencies. to expected to be at or near zero; usage

class of appliance through at least 1987, calculate any changes in market shares. behavior is not influenced by the

The Federal energy conservation usage behavior. or investment in ~xpense of operating the appliance. DOE

standards for new units of these building shell thermal improvements will appreciate any comments on this

appliances are expected to be met by that may occur as a result of standards. assumption,

the effective date of the standard. After and to calculate the net energy savings. 9. Energy Consumption Calculations

that date. future efficiency 6. Turnover of Appliance Stocks improvements are assumed to be a The total energy consumption per

function of designs available (according The initial age distribution of house for each end-use and fuel by

to the engineering analysis) and of appliances in sto.ok is characterized house type and vintage (existing or new)

relevant energ-i prices. DOE believes the based on industi"Y data about historical is the product of the unit energy

forecasting algorithm is designed to annual shipments, The fraction of each consumption (accounting for efficiency

allow annual average efficiency or product that retires each year is based and capacity changes). and usage factor.

shipment-weighted efficiency factors on the number of years since purchase' e.g.• relative hours of operation for room (SWEFs) to increase if either more of the product For each year's purchase air conditioning. The corresponding

efficient designs become available at the model associates an average annual energy consumption for all

lower prices. or energy prices ii'lcrease. efficiency. so that when older households is the annual consumption

Conversely. if energy prices decrease, appliances are :retired, they are also per household times the number of

the SWEF may decline. but would have recognized as less efficient.s households of that type and vintage,

Ii lower bound at the 1990 Federal The number of potential purchasers of times the fraction of-those households

standard level. an appliance in new homes is,equal to owning that appliance.

th b f h Aggregate ene"""- consumption is

4. Thennal Integn'ty e nlh'1l er 0 new ames constructed -OJ

h Th obtah'1ed by summing intermediate

The proj'ection of the leuel of eac year. e nunlber of potential ult Fit' 1 I .,

l

'nve<'tmen' m' thermall'nt;g,.;ty purchasers of appliances in existing J'es s. or examp e. na lOna e ectflClty "" '"u' consumption for room air conditioners measures in new houses is based on a noulses is equal to the number ofretiring in a particular year is the sum across I f 1 app ianees, plus a fraction of those i e-cyc e cost calculation. analogous to households that did not previously own house types and house vintages of

that done for equipment efficiencies.II the product. . electricity used by room air

Estimates of the ineremental costs of conditioners. National residential

thermal integrity measures are used in 7. Calculation of Market Shares electricity consumption in that year is

conjunction with current fuel prices and the sum of all end-uses of electricity a discount rate. Estimates of Potential pu:rchasers may purchase consumption in the residential sector,

investm t I'n th l' t '1 t f't any competing technology within an en senna in egn y rerro· i 3 d 10. Model Outputs of existing houses are projected as a en -use, or none. For each end-use. . function of income and household long-tenn market share elasticities are The principal outputs from the LBLenerg'J expenditures,7 estimated with respect to equipment REM for each year are:

Price. operailing expense. and income. .. Energy consu~ptl'on by end use and

5. Modeling Efficiency Standards . ""i - respectively. The effact of standards is fuel.

The LBL-REM projects the average expected to be lower operating expense .. Total residential energy

efficiency of new products-for and increased equipment price. The consumption by fuel.

example. water heaters-purchased percentage changes in these quantities .. Per unit equipment price and

each year. in the absence of additional are used, together with market share operating expense by product.

Federal regulations. A distribution of elasticities. to determine changes in .. Projected annual shipments of

efficiencies is constructed around the market share resulting from standards. residential appliances.

average. based on efficiency The model assumes that higher .. Differences in these quantities

distributions observed in the equipment prices will decrease sales between a base and a standards case. marketplace. This infonnation includes volumes. while lower operating These outputs are provided ann.ually

expenses will increase them. The net (or for selected years) and cumulatively

result (predicted market share) depends over a period of time. e.g.• 1995-2020.

on the standard level selected, with its Energy savings are provided annually

associated equipment prices and from implementation ofstandards to the

operating expenses. end of the period. Net present value of

standards is evaluated for each

regulated product, and for the end-use(s)

comprising the regulated and competing

products.
Federal Register / Vol. 55,

Energy savings are calculated as the

difference in energy consumption

between the base case and standards

case. Energy consumption in both the

base case and standards case includes

building shell improvements, changes in

fuel choice, or changes in usage

behavior. Therefore, the energy savings

capture the net energy savings due to

regulation, including the effects induced

by shifts in market share or changes in

usage behavior.

Net present value, on the other hand,

excludes these types of effects.° Net

present value is calculated from per unit

changes in equipment and operating

expenses, multiplied by standards case

shipments. If the net present value were

calculated without normalizing with

regard to shipments erroneous results

would be obtained: if standards caused

decreased purchases of a product, this

would appear as an economic benefit,

namely, less money spent on purchasing

and using appliances;10 and if standards

resulted in increased purchases, this

would be incorrectly counted as a cost,

when it reflects consumers' preference

of the post-standards product.

Base case usage is assumed in

calculating the net present value, since

any "rebound effect" 11 reflects the

consumer's judgment that increased

usage is worth more than the direct

energy savings associated with keeping

usage constant. Therefore, deduction of

any foregone energy savings resulting

from a possible "rebound effect," prior

to calculating the net present value,

would result in an underestimate of the

true net present value associated with a

given efficiency improvement.

9 Present value is the discounted total value of

energy consumption during the appliances' lifetime,

plus the discounted equipment costs for those

appliances that are purchased during those periods,

at alternative standards levels. The difference

between each of the two cases is the net present

value (ANPV') attributable to standards (or amended

standards). A positive NPV for an appliance at a

given standard level indicates that, if that etandard

were adopted, consumers of that appliance as a

whole would save that much more money in fuel

costs, discounted to the present, than they would

pay in increased initial price for a more efficient

appliance, discounted to the present, compared to

the base case.

10 Without normalization, the greatest economic

benefit would be obtained by a standard level that

resulted in no future purchases of the product. Then

no money would be spent on purchasing the

product, or on operating expenses, and the value of

the savings would equal the amount of money that

would have been spent without the standard. This

would clearly be a misrepresentation of the net

present value of standards.

ii The "rebound effect" is the projected ens.-,y

savings, depending on the appliance, (from an

efficiency improvement) that does not occur. This

results when purchasers of more energy efficient

appliances use them more intensively, !hereby

saving less energy than the engineering estimates

would have indicated, in some instances, the

re`,ourcd is zero.

55FR39624

. 189 / Friday, September 28, 1990 / Proposed Rules

-11. Other Consumer Impacts

One measure of the effect of

standards on consumers is the change in

operating expense as compared to the

change in purchase price. This is

quantified by the difference in life-cycle

cost (LCC) between the base and

standards case for the appliance classes

analyzed. The LCC is the sum of the

purchase price and the operating

expense discounted over the lifetime of

the appliance. It will be calculated at the

average efficiency for each class, in the

year standards are imposed, with

consumer discount rates of 2, 7, and 15

percent. This reflects the range of

discount rates that purchasers of

appliances experience, depending upon

the manner in which they choose to

finance the purchase. The purchase

price is based on the factory costs in the

Engineering Analysis and includes a

factory markup plus a distributor and

retailer markup. The operating expense

is calculated from the unit energy

consumption derived in the Engineering

Analysis adjusted for differences in

usage, i.e., operating load hours,

between the test procedure and the

LBL-REM. Projected energy efficiencies

and usages are taken from the results of

LBL-REM.

The analysis will use seven percent

both for the calculation of LCC and in

the LBL-REM for calculating energy use

and NPV. The use of the discount rate in

the project of energy use is significant

because the LBL-REM projects

marketplace demand for more efficient

appliances based on the LCC. The LBLREM assumes that as the price of energy

increases, the LCC will increase. This

results because the value of the energy

consumed is greater which, in turn,

causes the marketplace to demand more

efficient appliances.

In the November 1989 Final Rule for

refrigerators, refrigerator-freezers,

freezers, and small gas furnaces (54 FR

47916, 47921, November 17, 1989), DOE

selected a seven percent discount rate

based on a methodology derived from

the Court of Appeals decision, PIRDC v.

Herrington, 768 F.2d 1355 (D,C, Or 1985).

As DOE discussed in the November 1989

Final Rule, the applicability of the court

decision has changed somewhat with

the passage of the Tax Reform Act of

1986 (lib. L. 99-514). The Tax Reform

Act will have phased out the

deductibility of interest paid on

consumer loans by the time amended

standards would be applicable. Based

on the revised methodology, DOE

calculated a range of discount rates that

consumers incur; this range is from less

than 1 percent to slightly more than 15

percent. As explained in the November

39631

1989 Final Rule, DOE selected seven

percent for the analysis for purposes of

that rulemaking proceeding because it

was near the mid-point of the potential

consumer discount rates. In addition,

DOE found that that approach had a

reasoned theoretical basis, in that it was

related to the opportunity cost of money

for purchasing consumer durables. As

such, it was justified in terms of

alternate consumer investment

opportunities that are foregone in order

to finance the purchase of appliances.

In this ANOPR DOE is not suggesting

a lower consumer rate, based on real

after tax rates associated with consumer

purchases of appliances, inasmuch as it

does not have at this juncture any

empirical basis for the recommendation

of a rate below seven percent.

Therefore, unless and until any broadbased and reliable empirical data can be

developed on the methods consumers

use to finance purchases of appliances,

DOE will continue to use seven percent,

for the reason mentioned above.

Nevertheless, because the range of real

after-tax rates of finance is so broad,

DOE has expanded its sensitivity

analysis from using 5 and 10 percent

rates to using 2 and 15 percent rates. It

is believed that this broader range of

sensitivities will better reflect the wide

variation in actual consumer financing

rates, and therefore, better capture the

significance of any differences resulting

from the range of rates,

Two other measures of economic

impact are useful in evaluating the

impacts on consumers. The payback

period measures the amount of time it

takes to recover, through lower

operating expenses, the additional

expenditure on increased efficiency.

Numerically, it is the ratio of the

increase in purchase price between the

base and standards. cases to the

decrease in annual operating

expenditures. Both the numerator and

denominator of this expression are

evaluated at the average efficiency in

the year standards come into effect and

at the energy prices in that year. The

cost of conserved energy is the increase

in first cost amortized over the lifetime

of the appliance at the consumer

discount rate divided by the annual

energy savings. The consumer will

benefit whenever the cost of conserved

energy is less than the price of energy

for that end use.

c. Commercial Ens o y Modal

For the analysis of fluorescent lamp

ballasts, an end-use model of energy

consumption in the commercial sector

will be used, based on the work

performed at Battelle Pacific Northwest

 CE-RM-90-201 COMMENT 0A

_.

55FR39624

Fedei'al Register I Vol. 55. No. 189 I Friday. September ZB. 1990 I Proposed Rules 39531 T fmc 71'!CV 1!l EL 2UZCW ra

Energy savings are calculated as the

difference in energy consumption

between the base case and standards

case. Energy consumption in both the

base case and standards case includes

building shell improvements. changes in

fuel choice, or changes in usage

behavior. Therefore. the energy savings

capture the net energy savings due to

regulation, including the effects induced

by shifts in market share or changes in

usage behavior.

Net present value. on the other hand.

excludes these types of effects. 9 Net

present value is calculated from per unit

changes in equipment and operating

expenses, multiplied by standards case

shipments. Ifthe net present value were

calculated without normalizing with

regard to shipments erroneous results

would be obtained: ifstandards caused

decreased purchases of a product. this

would appear as an economic benefit.

namely, less money spent on purchasing

and using appliances; 10 and ifstandards

resulted in increased purchases, this

would be incorrectly counted as a cost,

when it reflects consumers' preference

of the post-standards product.

Base case usage is assumed in

calculating the net present value. since

any "rebound effect" 11 reflects the

consumer's judgment that increased

usage is worth more than the direct

energy savings associa ted with keeping

usage constant. Therefore, deduction of

any foregone energ-y saviJ:1..gs resulting

from a possible "rebound effect," prior

to calculating the net present value,

would result in an underestimate of the

true net present value associated with a

given efficiency improvement.

• Present value is the discounted total vaillil of

energy cnnsumption during the appliances' lifetime.

plus the discounted equipment costs for those

appliances thai are purchased during those periods.

at alternative standards ~eve!s. The difference

between each of the two cases is the net present

value [NPVj attribul>;ble to sl1lndards (or amended

standards]. A positive NPV for an appliance at a

given standard level indicates that. if that etlIDdlITd

were adopted, consumers of that appliance as a

whole would save that much more money in fuel

costs. discotmted to the present. than they would

pay in increased Initial price for a more effiCient

appliance. discounted to the present, compared to

the base case.

x. 1/Vithau! nonnalization. the greatest economic

oenefH would be obtained by a standard level that

resulted In no future purchases of the product. Then

no money would be spent on purcnasing the

product, or on. operating expensea. and LlJe value of

lile savings would equal the amolL'll of money that

would have been spent without the standard. This WCllid clearly be a misrepresent!lthm of the net

present value of standards.

" The "rebound effect" is the projected canergy

navlng3. oepending on the appliance. [from an

ef!1ciem:y Improveme!ltj tilat does not occur. Tms

rp.s11ltll when purchasers of more energy efficient

appH.hiC€SU8e them mOre intensiv~iYl therepy

saving less energ<J than the engineeri"4 estimate.

would have !rldicated. In some instances, the

i~tound !5 zero.

11. Other Consumer Impacts

One measure of the effect of

standards on consumers is the change in

operating expense as compared to the

change in purchase price. This is

quantified by the difference in life-cycle

cost (LCC) between the base and

standards case for the appliance classes

analyzed. The LCC is the sum of the

'purchase price and the operating

expense discounted over the lifetime of

the appliance. It will be calculated at the

average efficiency for each class, in the

year standards are imposed. with

consumer discount rates of 2. 7, and 15

percent. This reflects the range of

discount rates that purchasers of

appliances experience. depending upon

the manner in which they choose to

finance the purchase. The purchase

price is based on the factory costs in the

Engineering Analysis and includes a

factory markup plus a distributor and

retailer markup. The operating expense

is calculated from the unit energy

consumption derived in the Engineering

Analysis adjusted for differences in

usage, i.e., operating load hours,

between the test procedure and the

LBI..-REM. Projected energy efficiencies

and usages are taken from the results of

LBL--REM.

The analysis will use seven percent

both for the calculation of LCC and in

the LBL-REM for calculating energy use

and NPV. The use of the discount rate in

the project of energy use is significant

because the LBI..-REM projects

marketplace demand for more efficient

appliances based on the LCC. The LBI..-

REM assumes that as the price of energy

increases. the LeC will increase. This

results because the value of the energy

consumed is greater which. in turn.

causes the marketplace to demand more

efficient appliances.

In the November 1989 Final Rule for

reTIigerators,refrigerator-freezers.

freezers, and small gas furnaces (54 FR

47916, 47921, November 17, 1989), DOE

selected a seven percent discount rate

based on a methodology derived from

the Court of Appeals decision, NRDG v.

Herrington, 768 F.2d 1355 (D.C. eir 1985).

As DOE dIscussed in the November 1989

Final Rule. the applicability of the court

decision has changed somewhat .vith

the passage of the Tax Reform Act of

1986 (Pub. L. 99-514). The Tax Reform

Act \'\-ill have phased out the

deductibility of interest paid cn

consumer loans by the time amended

sta..TJ.dards would be applicable. Based

on the revised methodology, DOE

calculated a range of disC01.L.'1t rates that

consumers incur; this range is from lass

man 1 percent to slightly more than 15

percent. As explained in the November

19!19 Final Rule. DOE selected seven

percent for the analysis for purposes of

that rulemaking proceeding because it

was near the mid-point of the potential

consumer discount rates. In addition,

DOE found that that approach had a

reasoned theoretical basis. in that it was

related to the opportunity cost of money

for purchasing consumer durables. As

such, it was justified in terms of

alternate consumer investment

opportunities that are foregone in order

to finance the purchase of appliances.

In this ANOPR DOE is not suggesting

a lower consumer rate. based on real

after tax rates associated with consumer

purchases of appliances. inasmuch as it

does not have at this juncture any

empi,rical basis for the recommendation

of a ra te below seven percent.

Therefore, unless and until any broadbased and reliable empirical data can be

developed on the methods consumers

use to finance purchases of appliances,

DOE \\Jill continue to use seven percent,

for the reason mentioned above.

Nevertheless, because the range of real

after-tax rates of finance is 80 broad.

DOE has expanded its sensitivity

analysis from using 5 and 10 percent

rates to using 2 and 15 percent rates. It

is believed that this broader range of

sensiti"ities will better reflect the wide

variation in actual consumer financing

rates, and therefore, better capture the

significance of any differences resulting

from the raJI..ge of rates,

Two other measures of economic

impact are useful in evaluating the

impacts on consumers. The payback

period measures the amQunt of time it

takes to recover, through lower

operating expenses. the additional

e:x.-penditure on increased efficiency.

Numerically, it is the ratio of the

increase in purchase price between the

base and standards cases to the

decrease in annual operating

expenditures. Both the numerator and

denominator of this expression are

evaluated at the average efficiency in

the year standards come into effect and

at the energy prices in that year. The

cost of conserved energy is the increase

in first cost amortized over the lifetime

of the appliance at the conSlllTIer

discount rate divided by the annual

energy savings. The consumsr will

benefit whenever the cost of conserved

energy is less than the price of energy

for that end use.

c. CommercialEnergy lvfodel

For the analysis of fluorescent lamp

ballasts, an end-use model of energy

consumption in the commercial sector

will be used, based on t.1)e work

performed at Battelle Pacific Northwest
396 2 Federal Registe

55FR39624

/ Vol. 55, No. 189 / Friday, September 28, 2999 / Proposed Rules

Laboratory for DOE. The model will

include a projection of commercial

floorspace by building type, and

projection of energy consumption by

end-use and fuel type. The important

interaction between other building

characteristics, especially air

conditioning energy consumption and

lighting energy consumption, will be

considered in estimating the energy

savings from more efficient fluorescent

lamp ballasts.

d. Manufacturer Impact Models

1. Conceptual Approach

The manufacturer impact analysis

estimates the overall impact of new or

amended standards on an industry's

profitability and scale of operation.

2. Measures of Impact

The analysis examines three types of

long-run impact: profitability; growth;

and competitiveness. Consequently, five

measures of impact are reported. They

are: Shipments; price; revenues; net

income; and return-on-equity (ROE).

ROE is the primary measure of

profitability, although gross margin and

return-on-assets (ROA) are also

reported. Assets and income provide the

primary measures of growth, and the

impact on competitiveness is analyzed

by looking at the relative changes in

growth and profitability.

Two short-run impacts are also

analyzed. First, the ability for the

industry as a whole and for specific

segments of the industry to provide the

one-time investments required to meet

the new standard is examined. Second,

if standards result in decreased sales for

the particular industry being analyzed,

the analysis examines the possibility of

price-cutting while the industry is

adjusting to a lower sales volume.

3. LBL Manufacturer Impact Model

(LBL-MIM)

In order to estimate the impacts of

energy efficiency standards, a computer

spreadsheet model, the Lawrence

Berkeley Laboratory Manufacturer

Impact Model (LBL-MINI), was

developed.

The LBL-MIM models a "typical year"

for the industry, both in the base case

and in the new standards case. The year

chosen for the model is the fifth year

after the imposition of standards. A fiveyear period is long enough to capture

any major impacts from the standard,

such as profitability changes or firm

entry into, or exit from, the industry.

Ideally, a manufacturer analysis

should look at the impact of a proposed

regulation on every firm that does

business in the industry under question.

However, because the industries being

analyzed have many manufacturers

making a particular product, a firm-byfirm analysis would be a very expensive

and not necessarily cost-effective

undertaking. In addition, the engineering

and financial data for most

manufacturing firms are proprietary and

are not routinely available for public

analysis. Because of these limitations on

data and resources. LBL-MIM models a

prototypical firm. In many cases this

firm represents a division of a larger

firm. Therefore, a prototypical firm is a

hypothetical firm representative of a

portion of the industry. Prototypical

firms are defined by parameters that are

important for determining the impacts of

standards and are consistent with data

for the portion of the industry they

represent. Important parameters used in

the model include the cost structure of

the firms, profitability ratios, relative

costs of complying with the new

standard, and marketing strategies.

A change in standard level affects the

analysis in three distinct ways.

Increased levels of standards will

require additional investment, will raise

production costs, and will affect revenue

both through price and demand.

The most obvious investment induced

by standards is the purchase of new

plant and equipment. This cost first is

evaluated from engineering data, and

then averaged by taking into account the

life of the investment, the date on which

it is made, tax laws, and the appropriate

costs of funds. An additional, and

sometimes larger, investment takes

place as the old inventory is replaced

with more expensive new units. The

model assumes previous inventory

ratios are maintained. A third form of

investment tracked by the model is the

change in the transactions demand for

cash that accompanies a change in

revenues.

Increased costs of production are

modeled by coupling engineering data

on changes in unit costs caused by

standards with data from LBL-REM on

the marketplace demand of the product.

Revenue is affected by both price and

shipments. Price is determined by

computing the markup over long-term

marginal costs and then using the

markup to determine an optimal price.

Demand is determined by price and

operating expense elasticities, coupled

with the changes in price and operating

expenses resulting from the standards.

The LBL-MIM produces several

outputs used in analyzing the impact of

standards on manufacturers. A

simplified pro forma income statement

is prepared foreach prototypical firm. In

addition to the income statement, five

main variables-shipments, price,

revenue, net income, and ROE-are

reported. The results are presented for

the without-standards (or without

amended standards) case and the withstandards (or with amended standards}

case, and the relative difference

between the two is also given.

4. Data Sources

The ILL-MRM needs data that

characterize both a particular industry

and prototypical firms within that

industry. Estimates of data are based on

information from five general sources:

LBL business consultation groups; the

Engineering Analysis; the Consumer

Analysis, public financial data; and

industry profiles.

e. Utility Impact Model

The utility analysis serves several

purposes within the overall assessment

of the impact of the proposed standards.

It contributes to quantifying the energy

savings by determining the reduction in

fossil fuels used for electricity

generation. The reduction in fossil fuel

consumption is also an input to the

Environmental Assess m.ent. By

calculating utility avoided costs, this

area of the analysis provides marginal

electricity costs. Finally, it examines the

impacts on the electric utility industry in

terms of changes in investment, revenue

requirements, the need for new

generating capacity, and residential load

factors.

The utility analysis adopts the

standard convention that the value of

electricity savings can be broken down

into energy (or marginal cost) savings

and capacity (or reliability) savings. The

energy impact measures the production

costs avoided by reduced electrical

demands, valued at the marginal energy

costs of the utility. The capacity impact

measures the reliability value of reduced

loads during system peak periods, which

is, by convention, valued at the cost of a

combustion turbine that would have

been needed to meet the load. The

analysis characterizes these avoided

costs per kWh of heating, cooling, and

baseload energy saved.'2 These values

are used to calculate societal benefits

from reduced electricity consumption.

The Utility Impact Model calculates

avoided energy costs based on a

disaggregation of the generation fuel mix

to the National Electric Reliability

Council (NERC) regions and a simplified

load duration curve for each region.

12 For the purposes of calculating utility avoided

costs, electric heating appliances are defined as

electric heat pumps and electric resistance hest,

cooling appliances are defined as room and central

air conditioners plus heat pumps, and baseload

appliances are defined as all other appliances.

 CE-RM-90-201 COMMENT 0A

55FR39624

!l9632 Federal Register I Vol. 55, No. 189 I Fr~day, September 28, 1990 I Proposed Rules ;;:~:::e::::t:i&U.::assaa;;; . aim FFi1Ii,..~g....... ..,..,.....,.,.~~~

Laboratorv for DOE. The model will However. because the industries being

include a projection of commercial analyzed have many manufactm'ers

floorspace by building ty-pe, and making a particular product, a fl1'1il-b~-

projection of energy conslll11ption by firm analysis would be a very expenSive

end-use and fuel type. The important and not necessarily cost-effective

interaction between omer building undertakir.g. In addition, the engineering

characteristics, especially air and financial data for most

conditioning energy consumption and manufacturina firms are proprietary and

lighting energy consumption, will be are not routin~ly available for public

considered in estimatLrlg the energy analysis. Because of these limitations on

savings fTom more efficient fluorescent data and resources, LBL-ML'I.1 models a

b I prototypical firm. In many cases this

lamp a lasts. firm represents Ii division of a larger

d. Manufactw'er Impact Models firm. Therefore. a prototypical f..rm is a

1. Conceptual Approach hypothetical ft,rm representative.of a portion of the mdustry. PrototyplCal Th~ manufacturer impact analysis firms are defined by parameters that are

estimates the overall impact of new or important for determining the impacts of

amended standards on an industry's standards and are consistent with data

profitability and scale of operalion. for the portion of the industri they

2. Measures of Impact represent. Important parameters used in

the model include the cost structure of

The analysis examines three types of the firms, profitability ratios, relati:ve

long-run impact: profitabiliri; growth; costs of complying with the new

and competitiveness. Consequently, five standard, and marketing strategies.

measures ofimpact are reported. They A change in standard level affects the are: Shipments; price; revenues; net anoJvsis in three distinct ways.

income; and return-on-equity (ROE). Incr;ased levels of standards will

ROE is the primary measure of require additional inves~ent, will raise

profitability, although gross margin and production costs, and will affect revenue

rsturn-on-assets (ROA) are also both through price and demand.

reported. Asseta 8.Ild income provide the The most obvious investment induced

primary measures of growth, and the by standards is the purchase of new

impact on competitiveness is analyzed plant and equipment. This cost first is

by looking at the relative changes in evaluated from engineering data, and

growth and profitability. then averaged by taking into accmmt the

Two short-run impacts are also life of the investment, the date on which

analyzed. First, the ability for the it is made, tax laws, and the appropriate

industry as a whole and for specific costs of funds. A...'1 additional. and

segments of the industry to provide the sometimes larger, investment takes

one-time mvestments required to meet place as ti'le old inventory is replaced

the new standard is examined. Second, with more expensive new units. The

ifstandards result in decreased sales for model assumes previous inventory

the particular industry being analyzed, ratios are maintained. A third form of

the analysis examines the possibility of investment tracked by the model is the

price-cutting while the industry is change in the transactions demand for

adjusting to a lower sales volume. cash that accompanies a change in

M d 1 revenues. 3. LBL Manufacturer Impact 0 e, Increased costs of production are

(LBL-MIM) modeled by coupling engineering data

In order to estimate the impacts of on changes in unit costs caused by

energ'J efficiency standards, a computer standards with data from LBL-REM on

spreadsheet model, the Lawrence the marketplace demand of the product.

Berkeley Laboratory Manufacturer Revenue is affected by both price and

Impact Model (LBL-ML'vl), was shipments. Price is determined by

developed. computing the markup over long-term

The LBL-MIM models a "typical year" marginal costs and then using the

for the industry, both in the base case markup to determine an optimal price.

and in the new standards case. The year Demand is determined by price and

cllosen for the model is the fifth year operating expense elasticities. coupled

after the imposition of standards. A five- with the changes L'l price and operating

year period is long enough to capture expenses resulting from the standards.

any major impacts from the standard, The LBL-MIM produces several

such as profitability changes or firm outputs used in analyzing the impact of

entry into, or exit from. the industry. standards on manufacturers. A

Ideally, a manufacturer analysis simplified pro forma income statement

should look at the impact of a proposed is prepared for each prototypical firm. In

regulation on every firm that does addition to the income statement, five

business in the industry under question. main variables-shipments. price,

revenue, net income, and ROE-are

reported. The results are presented for

the without-standards (or wit..'lout

amended standards) case and thewithstandards (or with amended standards}

case, and the relative difference

between the two is also given.

4. Data Sources

The LBL-.MIM: needs data that

characterize both a particular industry

and protot;ypical firms within that

indusfrlJ. EstLTfiates of data are based on

information from five general sources:

LEL business consultation groups; the

Engineering Analysis; the Consumer

Analysis, public financial data; and

industry profiles.

e. Utility Impact Model

The utility analysis serves several

pu..."'P0ses within the overall assessment

of ilie impact of the proposed standards.

It contributes to quantifying the energy

sav:ings by determining the reduction in

fossil fuels used for electricity

generation. The reduction i.ll fossil fuel

consumption is also an mp.ut to the

Environmental Assessment. By

calculating utility avoided costs, this

area of t.~e analysis provides marginal

electricity costs. Fmally, it examines t~e

impacts on the electric utility industry ill

terms of changes in investment. revenue

requirements. the need for new

generating capacity, and residential load

factors.

The utility analysis adopts Hle

standard convention that the value of

electricity savings can be broken down

into energy (or marginal cost) savings

and capacity (or reliability) savings. The

energy impact measures the production

costs avoided by reduced electrical

demands, valued at the marghral energy

costs of the utility. The capacity impact

measures the reliability value of reduced

loads dlli'"ing system peak periods, which

is, by convention. valued at the cost of a

combustion turbine that would have

been needed to meet the load. The

analysis charapterizes these avoided

costs per kWh of heating, COO!i.Jlg, and

baseload energy saved.l2 These values

are used to calculate societal benefits

from reduced electricity conslL'!lption.

The Utility Impact Model calculates

avoided energy costs based on a . . disaaoregation of the generation fuel rmx

to th~"Nation.al Electric Reliability

Council (NERC) regions and a simplified

load duration curve for each region.

12 For the purposes of calculating utility avoided

costs, electric heating appliances are defined 88

electric heat pumps and electric resislance-',eal,

cooling appliances are defined as room ana central

air condiiioners plus heat pumps. and baseload

appliances are defined as all other appliances.
55FR39624

Feder 1 Register / V61. 55, No. 189 / Friday, September 28, 1990 / Proposed Rules 396333.

First, the model allocates national

electricity savings that are forecasted by

the LBL-REM to NERC regions in

proportion to their current consumption

of heating, cooling, and baseload energy.

The regional proportions are derived

from data on regional appliance

saturations, efficiencies, and hours of

use. The fraction of the electricity that

would have to be generated at the

margin from oil and gas is calculated

from the total regional oil and gas

fraction and the simplified load duration

curve. Projected utility natural gas and

coal prices, weighted by the oil and gas

fraction and the non-oil and gas fraction

respectively, are used to calculate utility

marginal costs over the forecast period.

The marginal costs are adjusted to

account for seasonal differences.,

The avoided capacity cost calculation

in the model is based on conservation

load factors (CLFs) for the energy

savings attributable to the standards, as

well as the capacity value of a

combustion turbine. A CLF is defined as

the average hourly energy savings of a

conservation measure divided by its

peak load savings. The CLFs are a way

of characterizing the peak demand

savings of a conservation :measure. They

are used to convert the capacity value of

the standards into the per kWh values

described above. The NERC forecasts of

capacity requirements for each region

are used to account for regional

variations in reserve margin. If NERC

forecasts an adequate reserve margin in

a region for a given year, no reliability

value is given to the capacity savings in

the region.

The inputs needed for the Utility

Impact Model are CLFs, state-level

utility fuel prices, appliance saturations,

efficiencies, and hours of use, as well as

electricity generation by fuel type and

capacity need by NERC region. The

outputs of the analysis are the fuel

savings, the reduction in the need for

new generating capacity, and the

avoided energy and capacity costs for

heating, cooling, and baseload

appliances per million Btu of resource

energy.

f. Sensitivity Analyses

Sensitivity studies are performed to

determine how changes in technical and

operational parameters affect key

engineering and economic indicators

used in evaluation of appliance

standards. This makes it possible to

place limits on the. overall results of the

analysis and to gain an understanding of

which variables are most important in

producing these results. Sensitivity

analyses are developed in a series of

distinct steps. For each component

analysis in the overall analysis, critical

input parameters are identified and

reasonable ranges of variation

determined. The sensitivity of the model

to changes in the value of each

important parameter is then estimated

by running the model for both the base

case and the standards cases. The

results of the sensitivity analyses are

examined to determine the sensitivity of

the forecasts to exogenous variables

and assumptions and the sensitivity of

the differences between the base and

standards cases (impacts of alternative

standards).

IV. Comments

a. Questions for Public Comment

DOE is interested in receiving

comments and data concerning the

accuracy and workability of this

methodology. Also, DOE welcomes

discussion on improvements or

alternatives to this approach. In

particular, DOE is interested in

gathering data on the following:

Descriptive and performance

characteristics for baseline models of

each product class that are the subject

of this rulemaking. These models should

be those satisfying the appropriate

standards;

Proposed product classes for

kitchen ranges and ovens, pool heaters,

mobile home furnaces, fluorescent lamp

ballasts and any other products in this

rulemaking;

® Costs of baseline units and

incremental costs of designs improving

the energy efficiency of the products

that are the subject of this rulemaking;

a Appropriateness of existing test

procedures to the proposed design

Options;

a Data on consumer financing of

appliances useful for obtaining a

weighted average discount rate;

a Estimates of performance and cost

of horizontally rotating top loading

clothes washers;

a Appropriate method to incorporate

pool heaters into the LEL-FEM;

a Usage patterns in commercial

applications of fluorescent lamp

ballasts, since, to date, the LBL-REM

has been limited to residential

applications;

a Appropriate methodologies for

analyzing standards for room air

conditioners, including comments and

data on alternatives to CFC 22 (a

refrigerant allowed by the Montreal

Protocol but included in proposed

Congressional legislation to ban

additional CFC products);

a Appropriate modifications to the

LBL-REM to accommodate adding heat

pniiip water heaters and gas-fired

instantaneous water heaters as a new

class;

a Impact on efficiency and cost of

fluorescent lamp ballasts of limiting

harmonic content; and

a Heating efficiency of various types

of range and oven elements including

open, solid, radiant, induction, halogen,

and burners including conventional,

sealed, and radiant.

DOE has been unable to identify any

small manufacturers. Nevertheless, for

purposes of this analysis, small

manufacturers' costs are assumed to

equal those of medium manufacturers.

DOE is especially interested in learning

of the existence of such manufacturers,

and in obtaining cost data from small

manufacturers of the products under

consideration.

For the !,BL-REM, DOE requests

interested parties to provide historical

data on shipments and average

efficiencies by class for the products

subject to the proposed rulemaking.

Data on consumer prices and on the

installation and maintenance expenses

of these appliances are also requested.

The manufacturer analysis needs the

financial data from the product division

level. All of these data are available at

the firm level, but since firms are

typically much larger than the relevant

division, the firm data may give a

misleading indication of the division's

finances,

An income statement and balance

sheet at the division level would be

most helpful. If this is not available, then.

da,a on the following variables are

considered most essential: net income,

revenue, selling and general and

administrative costs, engineering costs,

costs of goods sold, interest, taxes, debtto-equity ratio, net depreciable assets,

net assets, capital investment, and longterm

^n

debt.

a DOE also welcomes current dote on

unit sales and revenues for the

industries as a whole.

b. Comment Procedure

interested persons are invited to

submit written comments to the address

indicated in the beginning of this notice

in the ADDRESSES section. Comments

should be identified on the outside of

the envelope and on the documents

submitted to DOE with the designation

CE-RM-90-201. Eight copies are to be

submitted. All comments received by

the date specified at the beginning of

this ANOPR and all other relevant

information will be considered by DOE

before it continues this rulemaking

proceeding. Pursuant to 10 CFR 1004.11,

any person submitting information

which he or she believes to be

 CE-RM-90-201 COMMENT 0A

55FR39624

Federal Register I Vol. 55, No. 189 I Friday, September 28, 1990 ! Proposed Rules 39633 A£t!£lCt~ :::w:a & ..xu G'§ MUUZ::S:::::

First, the model allocates national

electricity savings that are forecasted by

the LBL-REM to NERC regions in

proportion to their current consumption

of heating, cooling, and baseload energy.

The regional proportions are derived

from data on regional appliance

saturations, efficiencies, and hours of

'Use. The fraction ofthe electricity that

would have to be generated at the

margin from oil and gas is calculated

[mID the total regional oil and gas

fraction and the simplified load duration

curve. Projected utility natural gas and

coal prices, weighted by the oil and gas

fraction and the non-oil and gas fraction

respectively, are used to calculate utility

marginal costs over the forecast period.

The marginal costs are adjusted to

account for seasonal differences,

The avoided capacity cost calculation

in the model is based on conservation

lload factors (CLFs) for the energy

savings attributable to the standards, as

well as the capacity value of a

combustion turbine. A CLF is defined as

!the average hourly energy savings of a

conservation measure divided by its

peak load savings. The CLFs are a way

of characterizing the peak demand

savi.ngs of a conservation meaSUie. They

are used to convert the capacity value (If

the standards into the per kWh values

described above. The NERC forecasts of

capacity requiI'ements for each region

<lire used to account for regional

variations in reserve margin. If NERC

forecasts ll.nadequate reserve margin in

a region for a given year, no reliability

value is given to the capacit~' savings in

the region.

. The inputs needed for the Utility

Impact Model are CLFs, state-level

utility fuel prices, appli£illce saturations,

efficiencies, and hours of use, as weH as

electricity generation by fuel type and

capacity need by NERC region. The

outputs of th.a analysis are the fuel

savings, the reduction in the need for

new generating capacity, and ilie

avoided energy and capacity costs for

heating, cooling, and base!oad

appliances per million Btu of resource

energy.

/. Sensitivity Analyses

Sensitivity studies are performed to·

determine how changes in technical and

operational parameters affect key

engineering and economic indica tors

used in evaluation of appliance

standards. This makes it possible to

place limits on the. overall results of the

analysis and to gain an understanding of

which variables are most important in

producing these results. Sensitivity

analyses are developed in a series of

distinct steps. For each component

analysis in the overall analysis, critical

input parameters are identified and

reasonable ranges of variatio.n

determined. The sensitivity of the model

to changes iIi the value of each

important parameter is then estimated

by running the model for both the base

case and the standards cases. The

results of the sensitivity analyses are

examined to determine the sensitivity of

the forecasts "to exogenous variables

and assumptions and the sensitivity of

the differences between the base and

standards cases (impacts of alternative

standards).

iV. Comments

a. Questions for Public Comment

DOE is interested in receiving

comments and data concerning the

accuracy and workability of this

methodology. Also, DOE welcomes

discussion on improvements or

alternatives to this approach. In

particular, DOE is interested in

gathering data on the following:

.. Descriptive and performance

characteristics for baseline models of

each product class that are the subject

of this rulemaldng. These models should

be HlOse satisfying the appropriate

standards;

" Proposed product classes for

kitchen ranges and ovens, pool heaters,

mobile home furnaces, fluorescent lamp

ballasts and any other products in thi.s

rulemaking;

<> Costs of baseline units and

incremental costs of designs improving

the energy efficiency of the products

that are the subject of this rulemaking;

Appropriateness of existing test

procedures to the proposed design

options;

.. Data on consumer financing of

appliant"les useful for obtaining a

weighted average discount rate;

.. Estimates of performance and cosl

of horizontally rotatifl.g top loading

clothes washers;

.. Appropriate method to incorporate

pool heaters into the LBL-F.EJ.\II:

" Usage patterns in commercial

applications of fluorescent lamp

ballasts, since, to date, the LEL-REM

has been limited to residential

applications;

.. Appropriate methodologies for

analyzing standards for room air

conditioners, including COllL'l1ents and

data on alternatives to CFG-Z2 (a

refrigerant aliowed by the Montreal

Protocol but included in proposed

Congressional legislation to ban

additional CFC products);

.. Appropriate modifications to the

lLBL-REM to accommodate adding heat

pump water heaters and gas-fired

instantaneous water heaters as a new class; .

.. Impact on efficiency and cost of

fluorescent lamp ballasts of limiting

harmonic content; and

.. Heating efficiency of various types

of range and oven ",lements including

open, solid, radiant, induction, halogen.

and burners including conventional,

sealed, and radiant.

DOE has been unable to identify any

small manufacturers. Nevertheless, for

]purposes of this analysis, small

manufacturers' costs are assumed to

equal those of medium manufacturers.

DOE is especially interested in learning

of the existence ofsuch manufacturers,

and in obtaining cost data from sm.all

ll11anufacturers of L1.e products under

consideration.

for the LEL-Rat, DOE requests

interested parties to provide historical

data on shipments and average

efficiencies by claus for the producls

subject to the propo:>ed mlernaidng.

Data on consumer pi"ices and on the

installation and maintenance expenses

of these appliances are also requested..

The manufacturer analysis needs the

financial data from the product division

Revel. All of these data are availablf! .at

Ithe firm level. but since firms are

typically much larger than the relevant.

division. the firm data may give a

m.isleading indication of the divisloi!1':$

finances.

An i.ncome statement and ba1tmcre:

sheet at the division level would be

most helpful. If this is not available, then

data on the foJlowing variables are

considered most essential: net im::mlle,

revenue, selling and general and

administrative costs, engineering costs.

costs of goods sold, interest. ia-..;es, de!:Jtto-equity ratio, net depreciable <ISsets,

net aszets, capital imrestment, mnd iongt",:rm debt.

DOE also welcomes cUl'l'ent aula on

Il:mH sales and revenues for the

industries as a whole.

b. Comment Procedure

interested persons are invited lO

submit written comments to the address

iI..dicaied in the beginning of iliis notice

in the AODRESSES section. Comments

should be identified on the outside of

the ,envelope and on the documents .

submitted to DOE with the designation

CE-RM-9Q-201. Eight copies are to be

submitted. AU comments received by

the date specified at the beginning of

this ANOPR and all other relevant

information will be considered by DOE

before it continues this rulemaking

proceeding. Pursuant to 10 CPR 1004.11.

any person submiUing information

which he or she believes to be
55FR39624

Sfi Federal Register I Vol. 55, No. 159 / Friday, September 28, 1990 / Proposed Rules

confidential and exempt by law from

public disclosure should submit one

complete copy of the document and

seven copies from which the information

believed to be confidential has been

deleted. DOE will make its own

determination with regard to the

confidential status of the information

and threat it according to its

determination.

Factors of interest to DOE when

evaluating requests to treat as

confidential information that has been

submitted include: (1) A description of

the item, (2) an indication as to whether

and why such items of information have

been treated by the submitting party as

confidential, and whether and why such

items are customarily treated as

confidential within the industry; (3)

whether the information is generally

Inown 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) an indication as to when

such information might lose its

confidential character due to the

passage of time, and (7) whether

disclosure of the information wotdd be

in the public interest.

Issued in Washington, DC, on September

29,1990.

J. Michael Davis,

Assistant Secretary; C''anse; vaiicri mu!

+ new able Energy.

[FR Doc. 90-23023 Filed 9-27-90; 8.45 am']

e9LUNG CODE 5456.51-9

FARM CREDIT SYSTEM INSURANCE

CORPORATION

12 CFR Part 1410

Premiums

AGENCY: Farm Credit System Insurance

Corporation.

ACTION: Proposed rule.

SUMMARY: The Farm Credit System

Insurance Corporation (Corporation) is

proposing regulations concerning the

computation and payment of premiums.

The Corporation was established on

January 6. 1988, the date of enactment of

the Agricultural Credit Act of 1987

which amended the Farm Credit Act of

1971 (Act). The Corporation is

empowered to prescribe such rules and

regulations as it considers necessary to

carry out its responsibilities. In the

proposed regulations the Corporation

interprets the premium calculation .

formulas included in the Act, clarifies

the methodology to be used in

calculating premiums to be paid to the

Corporation by insured Farm Credit

System banks, defines certain

terminology, prescribes the form and

content of certified statements, and

establishes the date and place for filing

certified statements and for payment of

premiums.

DATES: Comments must be submitted on

or before October 29, 1990.

ADDRESSES: Written comments may be

mailed (iii triplicate) to the Board of

Directors, Farm Credit System Insurance

Corporation, 1501 Farm Credit Drive,

McLean, VA 22102-0828. Copies of all

communications received will be

available for examination by interested

parties in the offices of the Farm Credit

System Insurance Corporation, 1501

Farm Credit Drive, McLean, VA.

FOR FURTHER INFORMATION CONTACT:

Bobbie Jean. Norris, Project Analyst,

Farm Credit System Insurance

Corporation, McLean, VA 22102-0826,

(703) 883-4367, TDD (703) 883-4444

or

James M. Morris, Attorney, Farm Credit

System Insurance Corporation,

McLean, VA 22102-0826, (703) 8855-

4020, TDD (703) 883-4444.

SUPPLEMENTARY INFORMATION: The

Agricultural Credit Act of 1987, Public

Law 100-233, amended the Farm Credit

Act of 1971 (Act) by adding provisions

concerning the Farm Credit System

Insurance Corporation (Corporation).

One of the purposes for which the

Corporation was established is to insure

the timely payment of principal and

interest on notes, bonds, debentures,

and other obligations issued under

subsection (c) or (d) of section 4.2 of the

Act on behalf of one or more Farm

Credit System banks (System banks).

Effective January 6,1989, each System

bank participating in such obligations

became an insured System bank.

In order to provide the Corporation

with funds to meet its obligations, the

Act provided for the transfer, as of

January 6,1989, of all amounts in the

revolving fund established by section 4.0

of the Act into the Farm Credit

Insurance Fund (Insurance Fund), which

served as the initial capital of the

Corporation. The Act provides for

further funding of the Corporation to

come from premium payments by

System banks. The Corporation will

deposit in the Insurance Fund all

premium payments received from

System banks.

Premiums are to be paid.beginning as

soon as practicable after January 1,

1990, and no less frequently than

annually thereafter. Except for the

premium payment which covers

calendar year 1989, section 5.55 of the

Act requires that the annual premium

due from each System bank for each

calendar year be equal to the sum of (1)

the annual average principal

outstanding for such year on its loans

that are in accrual status, excluding the

guaranteed portions of certain

government-guaranteed loans,

multiplied by 0.0015, (2) the annual

average principal outstanding for such

year on its loans that are in nonaccrual

status, multiplied by 0.0025, (3) the

annual average principal outstanding for

such year on the guaranteed portions of

its Federal government-guaranteed

loans that are in accrual status,

multiplied by 0.00015, and (4) the annual

average principal outstanding for such

year on the guaranteed portions of its

.State government-guaranteed loans

made by the bank that are in accrual

status, multiplied by 0.0003. The

premium payment for calendar year

1989 is to be based on the annual

average principal outstanding on only

the accruing loan volume.

Section 5.55(d) of the Act provides

that the principal outstanding on all

loans made by a System bank shall be

determined based on all loans of any

production credit association or other

association making direct loans under

authority provided under section 7.6 of

the Act (direct lending associations),

and loans of any bank, company,

institution, corporation, union, or

association described in section

1.7(b)(1)(B) of the Act (other financing

institution) that are able to be made

because the direct lending association,

or other financing institution is

receiving, or has received, funds

provided through a System bank, as well

as loans of each System bank other than

loans made to direct lending

associations, and other financing

institutions.

Premiums shall continue to be paid

according to this formula until such time

as the Insurance Fund exceeds the

secure base amount. The secure base

amount is defined in section 5.55(c) as

two percent of the aggregate outstanding

insured obligations of all insured System

banks at any point in time (adjusted

downward by a percentage of the

guaranteed portions of the principal

outstanding on State and Federal

government.guaranteed loans in accrual

status), or such other amount as the

Corporation, in its sole discretion,

determines to be actuarially sound. If

the amount in the insurance Fund

exceeds the secure base amount, the

Corporation shall reduce the annual

premium due from each System bank for

 CE-RM-90-201 COMMENT 0A

55FR39624

3ijfi34 Federal Register I Vol. 55. No. 189 I Friday. September 28. 1990 I Proposed Rules -_:cr rm~~?!""" ~:!G t UWLUbk& SLLJiiiIlftaoi ..... , '9J +;Ai!&&t:b&::i'!!itO

confidential ana exempt by law from

public disclosure should submit one

complete copy of the document and

saven copies from which the information

believed to be confidential has been

deleted. DOE will make Us own

determination with regard to tIre

confidential status of the information

and threat it accordiP.g to its

determination.

Factors of interest to DOE when

evaluating requests to treat as

confidential information that has been

submitted include: (1) A description of

the item; (2) an indication as to whether

and why such items ofinformation have

been treated by the submitting pal't'J as

confidential, iliid whether and wh}· such

items are customarily treated as

confidential within the industry; (3)

whether the information is generally

knov.m or available from other sources;

(4) whether the information has

previously been made available to

others with\1ut obligation concerning its

confidentiality; (5) an explanation of the

competitive i.njury to the submitting

person which would result from public

disclosure; (6) an indication as to when

such information might lose its

confidential character due to the

passage of time; and (7) whether

disclosU1'e of the information would be

in ~e public interest.

Issued in Washington. DC. ell Sept.ember

19.1990.

J. Michael Davis,

AssistantSecretary, Conservation oou1

i1enewable Energy.

!.fR DOG. 90-23023 Filed 9-27-90; 8:45 am]

BlLUNG CODE 6450-01-1.1

FARM CREDIT SYSTEM INSURANCE

CORPORATION

12 Cf'R Part 1410

Pi"~mlums

AGENCY: Farm Credit System Insurance

Corporation.

ACTlor~: Proposed rule.

SUMMARY: The Farm Credit System

InliU1'aIlce Corporation (Corporation) is

proposing regulations concerning the

computation and payment of premiums.

The Corporation was established on

January 6. 1988, the date of enactment of

the Agricultural Credit Act of1987

which amended the Farm Credit Act of

1971 (Act). The Corporation is

empowered to prescribe such rules and

regulations a8 it cOIlBiders necessary to

carry out its responsibilities. In the

proposed regulations the Corporation

interprets the premium calculation

formulas included in the Act, clarifies

the methodology to be used in

calculating premiums to he paid to the

Corporation by insured Farm Credit

System banks. defmes certain

terminology. prescribes the form and

content of certified statements, and

establishes the date and place for filing

certified statements and for payment of

premiums.

DATES: Comments must be submitted on

or before October 29. 1990.

ADDRESSES: Written comments may be

mailed (in triplicate) to the Board of

Directors, farm Credit System Insurance

Corporation. 1501 Farm Credit Drive.

McLean, VA 22102-0826. Copies of all

communications received wi!l be

available for examination by interested

parties in the offices of the Farm Credit

System Insurance Corporation. 1501

Farm Credit Drive. Mclean, VA.

fOR FURTHER INFORMATION CONTACT:

Bobbie Jean Norris, Project Analyst.

Farm Credit System Insurance

Corporation, Mclean, VA 22102-{}826,

(703J 883-4367. TDD (703) 883-4.444

or

James M. Morris, Attorney, Farm Credit

System Insurance Corporation.

Mclean, VA 2210:Hl8Z6. (703) 8S&-

4020. TDD (703) 883-4444.

SUPPLEMENTARV INFORMATION: The

Agricultural Credit Act of 1987. Public

Law 100-233, amended the Farm Credit

Act of 1971 (Act) by adding provisions

concerning the Farm Credit System

Insurance Corporation (Corporation).

One of the purposes for which the

Corporation was established ill tu insure

the timely payment of principal and

interest on notes. bonds, debentures.

and other obligations issued under

subsection (c) or (d) ofsection 4.2 of the

Act on behalf of one or more Farm .

Credit System banks (System banks),

, Effective January 6.1989, each System

bank participating in such obligations

became an insured System bank.

In order to provide the Corporation

wih'1 funds to meet its obligations. the

Act provided for the transfer. as of

January 6, 1989, of all amounts in the

revolving fund established by section 4.0

of the Act into the Farm Credit

L'lsurance Fund (Insurance Fund). which

served as the initial capital of the

Corporation. The Act provides for

further funding of the Corporation to

come from premium payments by

System banks. The Corporation will

deposit in the Insurance P."mdaU

premium payments recehrec:l from

System banks. '

Premiums are to be paidheginning a8

soon as practicable after January 1,.

1990. and no less frequently than

annually thereafter. Except for the

premium payment which covers

calenda:r year 1989, section 5.55 of the

Act requirils that the annual premium

due from each System bank for each

calendar year be equal to the sum -of (1)

the annual average principal

outstanding for 8uch year on its loans

that are in accrual status, excluding the

guaranteed portions of certain

government-guaranteed loans,

multiplied by 0.0015, (2}L1.e annual

average principal outstanding for such

year on its loans that are in nonacCfuaB

status. multiplied by 0.0025. (3) the

annual average principal outstanding for

such year on the guaranteed portions of

its Federal government-guaranteed

loans that are in accrual status,

multiplied by 0.00015. and (4) the annual

average principal outstanding for such

year on the guaranteed portions of its

_State government-guaranteed loans

made by the bank that Bre in accrual

status. multiplied by 0.0003. The

premium payment for calendar year

1989 is to be based on the annual

average principal outstanding on only

the accruing loan volume.

Section 5.55(0) of the Act pro"ides .

that the principal outstanding on aU

loans made by a System bank shall be

determined based on all loans of any

production credit association or other

association making direct loans under

authority provided under section 1.6 of

the Act (direct lending associations).

and loans of any bank. company,

institution, corporation. union, or

association described tTl section

1.7(b)(1)(B) ofthe Act (other financing

institution) that are able to be made

because the direct lending association,

or other financing institution is

recaiving. or has received. funds

provided through a System bank, as W'BU

as loans of each System bank otb,er than

loans made to direct lending

associations. and ot~er financing

institutions.

Premiums shall continue to be paid

according to this formula until such time

as the Insurance Fund exceeds the

secure base amount. The secure base

amount is defined in section 5.55(c) as

two percent of the aggregate outstanding

insured obligations of all insured Syst{lID

banks at any point in time (adjusted

downward by a percentage of the

guaranteed portions of the principal

outstanding on State .and Federal

governmentiluaranteed loans in accrual

status). orsuch other amount as the

Corporation, inits sole discretion.

determines 'to be actuarially sound. If

the amountin the Insurance Fund

exceeds the secure base amount. the

Corporation shalll'educe the arinual

premium due from each Sy_stem bank foJ!'