### 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, 

## 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~d** Ru!emaldi"lg Regarding**IEll~'9Y** Conservation Standards fer 9 

### Tyl'M",.$ 01 Co!'!sllmer**Prodl.l~18**
AGENCY: Office'ofConservation 

### and Renewable Energy, Deparffilent of Energy. ,i\CTIOW: Advance notice ofpwposed 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 ofEnergy [DOE) to administer an energy conservationprogram 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, waterheaters, 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 ofthe instant rulemaking proceeding, DOE intendB to discharge the aforesaid statutory responsibilitiea.

The purposes ofthis Advance Notice 

### ofProposed Rulemaking (ANOPR) are to: (1) Present for comment the product 

### classes that DOE ia planning to analyze; f2) present a detailed discussion ofthe 

### 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 ofinformation and comments prior to publishing a subsequent notice ofproposed rulemaking,

One ofLi.e products to be considered berein. namely clothes washers, was the subject ofa previously published notice ofproposedrulemaking concerpjng anal'S'! conservation standards., (1':4 

### FR
32744. Aug. 9. 1989). However. subsequent to the October 10. 1989. dose ofthe comment period in that proceeding. DOEbecame aware ofa clothes washer design option currently in use in Europe which was notincluded 

### in the notice publishedby 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 ofenergy 

### and water, Accordingly, DOE has determined to include it in this rulemakmg proceeding in order to obtain information as to whether it is economicallyjustifiable. Due to the absence ofany 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** ofconsumerproducts,

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 ofConservation 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 ofConservation 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

ofEnergy. Office ofGeneral 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 sndAssumptions

a. E...'lginecl'ing PerformanceModels 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. LBLResidential Energ-j Model iLBL-rmM'!

1. Structure oft..\e mode! 2. Housing stock submodel 3, Efficiency choice algorHhm 4. Thermal integrity 5. Modeling efficiency standards 6. Turnover ofappliance stocks
7. Calculation ofmarket shMes 8. Usage behavior
9. Energy consumptioll Gulculatiof.lll 10. Model outputs 11. Other consumer impacts

c. Commercial Energy Model d. ManufacturerImpact Modem

1. Conceptnal approach 2. Measures ofimpact 3. LEt ManufacturerImpact MmM [lEL--

MIM) 4. Data sources
e. Utility ImpactModel f. Sensitivity Analyses IV. Comments

8.. Questions for Public Cemment b, Comment Procedures
I. IntJ:odutition

iI. 

### Autl1011ty

Part B oftitle HI ofEPCA, 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,'UerProducts Dther than Automobiles (Program), The

consumerproducts 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;

, PartB oftitle ill ofEPCA. as amended by NECPA, NAECA. andNAECA 19l16, is referred io in this ANOPR 8lS thlf "Act:' Peu'"tB oftitle ill is codified al42 U.S.C. 62S1 atseq. Par! B'Oftitle 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 ofany 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 

### • 

## 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



### andpool heaters; as well as any other

consumerproduct classified by the Secretary ofEnergy (Secretary) (section 322). To date, the Secretaryhas not so classified any additional products.

Under the Act. the Program consists essentially ofthree parts: Testing, labeling, and mandatory energy conservation standards. DOE, in consultation with the National Institute .ofStandards and Teclmology (NIST), is required to amend or establish new test procedures as appropriate for each of the covered products (section 323). The purpose ofthe test procedures is to provide for testresults that reflect the energy efficiency, energy use, or estimated annual operating costs 

### of each ofthe covered products (section 323(b)(3]).



### The Federal Trade Commission (FTC) 

### is required by the Act to prescribe rules governiiJ.g the labeling ofcovered products for which test procedures have been prescribed by DOE (section 324(a}). These rules are to require that each particularmodel ofa covered product bear a 

### label that indicates its annual operating cost and the range 

### of estimated annual operating costs for othermodels ofthat 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 FR46888. December 10, 1987; and 54 FR 28031. July 5, 1989.

For each of12 ofthe 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, DOEmay 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 ofthis ru!emaldng proceeding. For each ofthe 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'lanJanuary 1, 1992, for units manufactured afterJanuary 1, 1995.

For clothes washers, DOE is to issue 

### a final rule no later than five years after the date ofpublication ofthe previous final rule. As previously noted, on August 9, 

### 1989, DOE 

### published 

### a proposed rule concerning standards for three types ofconsumerproducts, 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 ofthe cornment period on thatproposed rule. DOE became aware ofa clothes washer design option that has the potential of Baving significant amounts ofenergy 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 

### thatrulemaking proceeding, it 

### cannotbe considered in**t.~e** 

### final rule. This rulemakL'lg will determine ifit is economicallyjustified.

Formobile 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 

### economicallyjustified (section 325(l)(2)(A».

Section 325(1)(2)(B)(i) provides that before DOE determines whether an energy conservation standard is economicallyjustified, it

### must first solicit comments onthe proposed standard. Afterreviewing comments on the proposal, DOE must then determine that the benefits ofthe standard exceed its burdens, based. to the greatest extent practicable. on 

### a weighing ofthe following seven factors:

(1) 

### The economic impact ofthe standard on the manufacturers and on the consumers ofthe products subject to such standard;

(2) The savings in operating costs throughout the estL'11ated average life of the coveredproduct in the type (or class) compared any increase in the price of, or in the initial charges for, or maintenance expenses ofthe covered products which are likely to result directly from the imposition ofthe standard; (3) The total projected amount of
energy savings likely to result directly from the imposition ofthe standard;

(4) 

### A:'ly lessening ofthe utility orthe performance ofthe covered products likely to result from the imposition ofthe standard;

(5) The impact ofany lessening of competition, as determined in writing by the Attorney General, that is 

### likely to resultfrom the imposition ofthe standard;

(6) 

### The 

### need for national energy conservation; 

### and

(7) 

### Otherfactors the Secretary considers relevant.

Section 327 

### ofthe Act addresses the effect ofFederal rules concerning testing. labeling, and standards on State laws orregulations concerning such

. matters. Generally, all such State laws

orregulations 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 exemptfrom Federal preemption (sections 327 (b)(3) and 

### (fJ(1)-f(4»); (3) 

### State regulations banning
constantburning pilot lights in pool heaters; and (4) 

### State standards for television sets effective on orafter January 1,1992, may remain in effect in the absence ofa Federal standardfor such products (sections 327 (b)(6) and (c)).



### The Act directs DOE to publish 

### an advance notice ofproposed rulemaking in advance ofDOE consideration of prescribing 

### a new or amended standard.

h. Background

OnDecember7, 1987, DOE published such a notice with respect to consideration ofenerg-y conservation standards for television sets (52 

### FR 46363). (Hereafterreferred to as**L~e** 

### December 1987 Notice).

On December 2, 1988, DOE published



### a notice ofproposed rulemaking to determine that 

### an energy conservation standardfor television sets would not be economicallyjustified.

On November 17, 1989, DOE 'published

a final rule which, 

### interalia, established

an energy conservation standard of78 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. Theseprojections .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 implementation 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 ofclothes 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 ovenscomprise 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 

### 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. DOEpoStponed action .on a fmal rule fortelevision sets for 

### a future rulemaking (54 FR47916). Theproposed rulemaking will determine whether conservation standards for television
sets arewarranted.

This ANOPRis an advancenotice for



### a proposedfinal nue. which the Act requires be published in the Federal 

### Registerby January 

### 1. 1992. for room air conditioners, waterheaters, direct heating equipment. mebilehome furnaces. kitchen·ranges and ovens. pool heaters and fluorescent lamp ballasts. The purpose ofthe 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 thathave 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 ofthe analysis ofthe impact ofthe standards. It offers an overview of the analytic methodology, and discusses 

### the major components ofthe analysis: 

### the Engineering Analysis. the ManufacturerAnalysis, and the Impact Analysis, which includes the Consumer Analysis. The section 

### also discusses the interrelationships among the components wl'Jch ensure consistency throughoutthe 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 ofenergy conservation standards. Quantitative estimates ofthe impacts ofstandards 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 ofappliance conservation standards wHl be determinedby <:omparing pn'iections under t.J,.e base case2 'with ilieprojectionsunder the proposed standards. These projections

_ willfirst be made .for the base -case by

use ofthe analytic models described below. The calculations will then be repeated imposing the proposed standard levels.

Thedifferencesbetween the projections 

### ofthe energy consumption and economic variables in the base and standards cases, respectively, provide quantitative estimates ofthe impacts of the standards. To evaluate the signTIicance ofthe differences. a sensitivity analysis will be performed on the keyparameters 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 ofdesign options to improve appliance efficiency. IIicluded in the analysis will be tolerances for engineering assumptions which mustbe made. Theaetolerances may be usedin establishing standard levels by setting the efficiency at the lower end ofthe range indicated when the tolerances are considered.

-. 'A ManufacturerAnalysis, which provides an estimate ofmanufacturers' response(s) to the proposed standards. Their responses are quantified by change in several financial performancemeasures.

• A Consumer Analysis, whichforecasts appliance sales, efficiencies, energy use,

consumer expenditures, andthe national net benefits and costs.

• A separate Life-Cycle Cost Analysis to evaluate the savings in operating expenses relalive to increases inpurchase price.

.. A Utility Analysis thai measures the projected impacts ofthe altered energyconsumption patterns on electric utilities.

Each analysis area will be performed for each ofthe nine products under consideration. The results ofthe Engineering Analysis 

### v.rill be reviewed by DOE to determine whether standards for 

### each product could yield measurable
energy savings. 

### Ifstandards would not yield energy savings-for example, 

### if there is no combination ofdesign 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 MallufacturerAnalyses. 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 ofthe cODserlrancn standards that were set by the Ad as to aU covered products urlderconsideration but clothes washers, and by DOE l"Jlemsking in the

case ofdothes washers. efficiencies 'ofdesign options, the ConsumerAnalysisJorecasts Jlales, efficiencies

### ofdesign options, 

### and efficiencies ofnew .andreplacement appliances, These data are used as inputs to theManufacturerAnalysis. whichnses them:to determine the financial impacts on prototypical

### firms within theindustry. The Consumer Analysis forecasts energy savings 

### and ,(;onsumerexpenditures on the purchase and operation ofthe appliances. Consumerexpenditures (both purchase and operation) are employed in the LifeCycle CostAnalysis to determine

consumerimpacts. Changes in sales.

revenues, investments. and marginal
costs ofutilities are calculated from the
energy savings in the Utility Analysis.

Two periods oftime are considered 

### by the analysis. First, the Consumer Analysis extends over a time period that is generally consistent wit.!"lthe lifetimes ofeach ofthe products. Second. the fvl:anufacturer Analysis is performed for



### a typical year 

### after the standards are assumed to have beenimposed. The typical year selected is the fifLh, by which time all majorimpacts ofa standard would have occurred. The Engineering Analysis, however, examines the technical feasibility of improving the efficiency ofthe covered products by analyzing design options available today to improve product efficiency, whether .they are commercially available orprototypes.



### III. Models. Data 

### and Assumptions



### a. EngineeringPerformqnce Models and CostingAnalysis

The Engineering Analysis addresses
two statutory requirements. The first requtrement is DOE's evaluation ofthe maximum L'11provements in energy efficiency that are technologically feasible. The second relates to the lessening of

### utility to the consumer of
any ofthe covered products 

### due to the imposition ofstandards. In addition, the Engineering Analysis provides L'1formation 

### on efficiencies. manufacturing costs, and appliance prices to othercomponents 

### ofthe overall analysis.

The features ofappliances that provide utility to the consumer are incorporated into the analysis through**t.~e** creation of

### appliance classes. Classes are a s11bBet ofapplianCE 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 ofdesign 

### 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 orelectricity), 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) 

## 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 ofthe 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 orperformancerelated features that provide utility to the consumer and affect efficiency. Classes are differentiatedin order to

ensure that consumerproducts having different capacities or other performance-related features affecting efficiency and utility remain available to

consumers.

For each ofthe nine appliances, the follovnng are the classes thatDOE
proposes to consider. DOE welcomes camlnents, in response to this ANOPR,

on whether additional classes are needed. (i) Room Air Conditioners.

Withoutreverse 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 waterheaters Electric heat pump waterheaters Gas instantaneous water heaters Electric instantaneous waterheaters

(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 Over46.000 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 Over20,000 Btu/hour up to 27,000 Btu/hour Over 27,000 Btu/hour up to 46.000 Btu/hour Over46.000 Btu/hour
(iv) Mobile Home Furnaces
Mo1;Jile Home Furnaces (v) Television Sets

Color Black and White

These classes are distinguishedby their ability orinability 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 ofthe use ofmultiple 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 colortelevision 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 withoutForced AirMovement 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 ForcedAir 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 andWall Ovens With Gas Thermal

andWithout Self-Clean Built-in andWall 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 orHighWattage Open Elements Solid Disk Elements Radiant Elements/Under Glass Induction Elements Halogen Elements/Under Glass Grill-With Down DraftFeature Griddle-With Down Draft Feature

Electric Ovens

Standard Electric Oven With orWithout 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 SealedBurners RadiantBurners

Gas Ovens

Standard Gas Oven With Cord (standard or

catalytic finish) Standard Ges Oven Without Cord (standard

or catalytic fmish) Gas Self-Clean Oven RadiantBurner 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
organ izations, 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 International Electrotechnical Conupission (IEC) Standard 705 (197 5). It is DOE'S understanding that this standard was amended by industry i t 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) HorizontalAxis 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 

## 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 thepurposes ofgenerating a cost/ efficiency relationship. the Engineering Analysis needs to define a starting point

or bas<,;1ine. The EngineeringAnalysis



### 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 ofh'18 analysis, e,g" a unit that marginally complies with the existing standard. Once identified, each baseline un.itis characterizedby lIs efficiency-related design options. DOE requests data on specific units and oombinations ofdesign 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 

### {formobile 

### 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 19Bat.ecau.se manufacturers were experiencing .a number ofproblems conducting the t:;8t. To date. DOE has not adopted the new standard and invites comments as to whether it &hould. DOE requests comments enboth the DOE design options listed below and the applicability ofthe 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 EludFan tvlotor Efficiency (C) Improved CompressorEfficiency (Dj Vcriable Speed Compressors (E) Alternative Refrigerants (F) Electronic ExpansionValves (G) Thermostatic Cyclic Controls

(il) WaterHeaters
(A) jacket Insulation (B) Heat Traps (C) Reduced HeatLeaks From Fittings (D) Reduced Pilot Light Input Rate (E) Automatic Ignition "

...lith a flue Damper (F) ElirrJnation ofCentral Flue and Indirect

Heating afWater (G) increasedFlue Baffling ·wit.l). Farced Draf1 (Hj Multiple Plues (I) Submerged Combusti-on Chamber (]JUseDfPulsed Contbustion (K) Ccndem:ation d Fiue Gases

For HeatPu.mp Water Heaters with a Tank
(L) lnlFeased HeatExcharrgerEffectiveness [M) lmpJ'oved Compressor &'10 Compressor

MotorEfficiencies (f"l Improved Fan and Fan MDiorEfficiencies

ForHeat 

### PUInp WaterHeaters without



### a Tank
(0) IncreasedHeat Exchanger**EffectiYen~ss**

for E,'aporator andCondenser (P) Improved Compressor and CompressQr

MotorEffiDfencies (Qj ImprovedFan and Pan :MotorEfficiencies (R) ImprovedWater Circulating Pump "nd

Pump Motor Efficiencies (S) lmproved Heat Exchanger Insulation (T) Improved Connection Hose Insulation

ForInstantaneous VtTaterHeaters
(U) Reduced Water in HeaterAfter Each

Draw 

## fin Reduced Pilot Light Input Rate (W) Increased Flue Baffling with. Forced Drart (X) !v!ultiple Flues (Y) Use ofPulsed 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 orModu.lal!ng Btil'nar (D) Improved BlowerMotorEfficiency (Ei PowerBU1TIer orInducedDraft (F) 1,creased 1

..sulation (G) Condensation ofFlu? Gases {Hi Pulsed Combustion

(iv) M:obile Home Fmnaces
(A) Increased HeatFJwhanger Surface Area (Bl Intermittent Ignition Device and "ilent

Damper (C) Two-stage or Modulating Burner (D) Improved Blower.Motor Efficiency (E) Fewer Burner 01' InducedDraft (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) 

### KitchenRanges 

### and Ovens

FOT Gas Cooktops

tAJ Thennostatically Controlled. Gas Bill'llcrs fE} Insulation/Reflective Surface

ForElectric Cooktops
(GJ Impro..-ed Contact Conductance CD)**L~sulat~on/Reflective** Smface

Fol'Ovens (Gas. Electric and Micr,}wsve)
(Ej lmproved Insulation ofthe Cabinet

Envelope (Fj Reduced Vent Size (G) Reduced Conduction Looses fHJ lmmlation withLcwerConduciivities (I) Use ofReflective Surlaceil (J) R"duction ofThermal Mass [K} For<::ed ConvectionDuring Cleaning (L) Oven Separator (alloiAing the user to

reduce oven volume when possible) eM) ImprovedMagnetrons

(vii) 

### .P<:>ol Heat"rs
fA) Reduced Pilot Light Input Rate (B) Automatic Ignition with H Flue Dampar (C) Elimination ofCentral Flue and.lndirect

11eatmg ofvVater (D) LTJ.creasp.d Flue Baffling with Forced Draft (Ej Multiple Flues (F) Submerged CombuatloI! Chamber (G) Use ofPulsed Combustion (H) Condensation ofFlue Gases

(viii) Fluorescent Lamp Ballasts
fA) Use ofCopperWire 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 ofWash Tub

4. Iviaximu.m.TechnologicallyFeasible 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 whieh
tne Secretary determines is technologically feasible and economicallyjustified." (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 technologicallyfeasible.



### 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 EngineeringAnalysis 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 thenational 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, anddemographic 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 abouthousing 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 recentMutual Energy Outlook, a publication of DOE's Energy Lformation Administration, 

## 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 ofbeing assembled, butnot necessarily manufactured, by the effective date ofa 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 ofthe efficiency ofvarious design options, and combination of design options, win be based on eiLher computer simulation models or experimental data based on the DOE
test procedures. DOErequests test data

on the efficiency ofthe 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 ofdesign options from existing appliances such as by measuring the wattage oftelevisions
sets available atretail 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 ofeach design option and combination ofdesign options, for each appliance class. Manufacturer and dealermarkups are applied to the manufacturing costs to deterrrJne the purchase price ofthe appliance. The price-efficiency relationships are a fundamental input to the Consumer Analysis.



## a. Data sources

Shipments data, costs ofpurchased 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 ofdesign options considered. the models anddata provide: .. Energ'j efficiency (expressed as the DOE energy factor) 3;

" Annual energ"j consumption per upit {based on DOE testprocedures);

.. Increased material, purchasedparts. labor, and investment costs for small .4 and large manufacturers by product 

### .class;

" The relationship betweenprice and ,efficiency level by product class; and

'" Other L'1formation 

### on product characteristics, such as maintenance 

### costs.


### b. LBLResidentialEnergy]'''Iodel(LBL

### REM)

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), Thatmodel was brought to Lawrence Berkeley Laboratory (LEL) in 1979 and adapted to the analysis of Federal appliance efficiency standards. The ORN"LModel has been updated by 

### LEL, resullli'1g in. 

### t.he LEL Residential Energy Model (LBL-REM] which is summarized below.

The LBL-RR\iforecasts ,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 

### ofparticular designs ofappliances, and calculates the national impacts ofa 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 ofenergy savings and consumer economic impacts (operating expenses and life-cycle costs).

Engineering, economic. and demographic data are used in the LBL

### REM. 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 ofenergy 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 ofthe wide variability in their approach to manufacturing. Therefore. small manufacturers costs have been assumed to equal those ofmedium 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 ofenergy 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

fOUffuels 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 differby 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. Forroom 

### air conditioners, waterheaters, pool heaters, mobile home furnaces, and directheating equipment, DOE will use the regional model (as data allow]. DOE requests comments on regional usage on each ofthe 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 ofbuildings and appliances.

2. Housing Slock Submodal

This submodel prepares data about housing stock projections for the LEI.- 

### REM. The number 

### ofoccup:ed households. by type, 

### is taken from the 1980 Censuses ofPopulation and Housing. An exogenous projection for housing starts is obtained aIld estimates

• The projections ofenergy pricee "'ill be taken from the 11:os1 recent**~'1I!uaJ** E:'Jergy Outlook. a publication ofDOE's Energy Information 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 isconstructed. 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 OutputsThe 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. 

## 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. Foreachyear analyzed, equipment effjciencyis projected and then Iheseresults are used to calculate investments in thermal integrity.

7 Based on E, Hirst, R. Goreltz, and H. Manning, Analysis ofHousehold RetrofitExpenditures. EnergySystems 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



### ofprojected demolition rates byhouse informationfrom industry source& and 8. Usage Behavior type are calculated. assuming an publisheddata 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. waterheaters. direct su mo e e ernnnes e projecte level eliminates part ofthe distribution; housing atock each year. 1981-2020. 

### by therefore, a new distribution is heating equipment. mobile home subtracting dem l'ti fr

. t' furnaces. andpool 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 usagebehavior. These changes are onra es youse ewe characteri..zes the efficiency ofnew units Ie 1 t 

### d . I f'l 1 'f i1 

### modeledbased 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 andincome. For

"'- 0 I-<! 

### ames, respec Ive y. 

### appliedto all years after implementati'on kitchenranges 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 ofappliance through at least 1987, 

### calculate any changes in 

### market shares. behavioris not influencedby the The Federal energy conservation usage behavior. orinvestmentin**~xpense** 

### ofoperating the appliance. DOE standards for new units ofthese building shell thermal improvements 

### will appreciate any comments on this appliances are expectedto be met by thatmay occur as a result ofstandards. assumption, the effective date ofthe standard. After and to calculate the net energy savings. 9. Energy Consumption Calculations that date. future efficiency 6. 

### Turnover ofAppliance Stocks improvements are assumed to be a The total energy consumption per function ofdesigns available (according The initial age distribution of house for each end-use andfuel by to the engineering analysis) and of appliances in sto.okis characterized house type andvintage (existing ornew) relevant energ-iprices. DOE believes the based on industi"Y data abouthistorical is the product ofthe unit energy forecasting algorithm is designed to annual shipments, The fraction ofeach consumption (accounting for efficiency allow annual average efficiency or product thatretires each year is based and capacity changes). and usage factor. shipment-weighted efficiency factors on the number ofyears since purchase' e.g.• relative hours ofoperation for room (SWEFs) to increase if

### eithermore oftheproduct Foreach year's purchase air conditioning. The corresponding efficient designs become available at the model associates an average annual energy consumptionfor all lowerprices. or energy prices ii'lcrease. efficiency. so thatwhen older households is the annual consumption Conversely. ifenergy prices decrease, appliances are :retired, they are also perhousehold times the number of the SWEF may decline. butwould have recognized as less efficient.s households ofthat type and vintage,

Ii 

### lowerbound at the 1990

### Federal The number ofpotentialpurchasers 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'1edby summingintermediate The proj'ection ofthe leuel of eac year. e nunlber ofpotential ult Fit' 1 I

.,

l

### 'nve<'tmen' m' thermall'nt;g,.;ty purchasers ofappliances in existing J'es s. or examp e. na lOna e ectflClty

"" '" u' 

### consumption forroom air conditioners

measures in 

### new houses is based on a noulses is equal to the number ofretiring in a particularyearis the sum across I f 1 app ianees, plus a fraction ofthose i e-cyc e cost calculation. analogous to households that did not previously own house types andhouse vintages of that done for equipment efficiencies. II 

### the product.

. electricity used by 

### room air Estimates ofthe ineremental costs of conditioners. National residential thermal integrity measures are used in 7. 

### Calculation of

### Market Shares electricity consumption in thatyearis conjunction with currentfuel prices and the sum ofall end-uses ofelectricity

a discountrate. Estimates of Potentialpu: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 

### egny 

### rerro· i 3 

### d 10. 

### Model Outputs ofexisting houses are projected as a en -use, ornone. Foreach end-use

.

. function ofincome 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: P

rice. operailing expense. and income.

.. Energy**consu~ptl'on** 

### by end use and 5. 

### Modeling Efficiency Standards

. 

### ""i

- respectively. The effact ofstandards is fuel. The LBL-REM projects the average expected to be lower operating expense

.. Totalresidential energy efficiency ofnew products-for andincreased equipmentprice. The consumption byfuel. example. waterheaters-purchased percentage changes in these quantities

.. Perunit equipmentprice and each year. in the absence ofadditional are used, together withmarket 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 equipmentprices will decrease sales between a base and a standards case. marketplace. This infonnationincludes volumes. while lower operating These outputs are provided ann.ually expenses 

### will increase them. The net (orfor selected years) and cumulatively result (predicted market share) depends over a period oftime. e.g.• 1995-2020.



### on the standard level selected, with its Energy savings are provided annually associated equipmentprices and from implementation ofstandards to the operating expenses. end oftheperiod. Netpresentvalue 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 efficientappliances 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 

# _. 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 inboth 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 otherhand. excludes these types ofeffects. 9 Net present value is calculated from per unit changes in equipment and operating
expenses, multiplied by standards case shipments. 

### Ifthe netpresent value were calculated withoutnormalizing with regard to shipments erroneous results would be obtained: 

### if standards caused decreasedpurchases 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 ofthe post-standards product.

Base case usage is assumed in calculating the netpresent value. since
any "rebound effect" 11 reflects the consumer'sjudgmentthat increased
usage is worth more than the direct
energy savings associated 

### 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, wouldresult in an underestimate ofthe
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 ofthe two cases is the net present value [NPVj attribul>;ble to sl1lndards (or amended standards]. Apositive NPV for an appliance at a given standard level indicates that. ifthat etlIDdlITd

were adopted, consumers ofthat appliance as a whole would save thatmuch 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 ofthe 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 ofmoney that would have been spent without the standard. This
WCllid clearly be a misrepresent!lthm ofthe net present value ofstandards.

" 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 ofmore 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 ConsumerImpacts
One measure ofthe effect of standards on consumers is the change in operating expense as compared to the change in purchase price. This is quantifiedby the difference in life-cycle
cost (LCC) between the base and standards case for the appliance classes analyzed. The LCC is the sum 

### ofthe '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

consumerdiscountrates of2. 7, and 15 percent. This reflects the range of discount rates that purchasers of appliances experience. depending upon the mannerin 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 calculatedfrom 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 bothfor the calculation ofLCC and in the 

### LBL-REM for calculating energy use and

### NPV. The use ofthe discountrate in the project ofenergy 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 ofenergy increases. 

### the LeC will increase. This results because the value ofthe 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 discountrate based on a methodology derived from the Court ofAppeals decision, 

### NRDG v. 

### Herrington, 768 F.2d 1355 (D.C. eir 1985). As DOE dIscussed in the November 1989 Final Rule. the applicability ofthe court decision has changed somewhat 

### .vith the passage ofthe Tax Reform Act of 1986 (Pub. L. 99-514). The Tax Reform Act \'\-ill have phased out the deductibility ofinterest paid cn

consumer loans 

### by the time amended sta..TJ.dards would be applicable. Based

on the revised methodology, DOE calculated 

### a range ofdisC01.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 percentfor the analysis for purposes of that rulemaking proceeding because it

was near the mid-point ofthe potential

consumer discountrates. In addition, DOE found that that approach had a reasoned theoretical basis. in that it was related to the opportunity cost ofmoney forpurchasing consumer durables. As such, it was justifiedin terms of alternate consumerinvestment opportunities that are foregone in order
to finance the purchase ofappliances.

In this ANOPR DOE is not suggesting

a lowerconsumerrate. based on real after tax rates associated with consumer purchases ofappliances. inasmuch as it does not have at this juncture any empi,rical 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 ofappliances, DOE \\Jill continue to use seven percent, for the reason mentioned above. Nevertheless, because the range ofreal after-tax rates offinance is 80 broad. DOEhas expanded its sensitivity analysis from using 5 and 10percent rates to using 2 and 15 percent rates. It is believed that this broaderrange of sensiti"ities 

### will betterreflect the wide variation in actual consumerfinancing rates, and therefore, better capture the significance ofany differences resulting from the raJI..ge ofrates,

Two othermeasures ofeconomic impact are useful in evaluating the impacts on consumers. The payback periodmeasures the amQunt 

### oftime it takes to recover, through lower operating expenses. the additional e:x.-penditure on increased efficiency. Numerically, itis the ratio ofthe increase in purchase price between the base and standards cases 

### to the decrease in annual operating expenditures. Both the numerator and denominator ofthis expression are evaluated at the average efficiency in 

### the year standards come into effect 

### and
at the energy prices in that year. The
cost ofconserved energy is the increase in first cost amortized over 

### the lifetime ofthe appliance at the conSlllTIer discount rate divided by the annual
energy savings. The consumsr 

### will benefitwhenever the cost ofconserved
energy is less than the price ofenergy 

### for that 

### end use.



### c. CommercialEnergy

### lvfodel

For the analysis offluorescent lamp ballasts, 

### an end-use model ofenergy 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 yearafter 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 manufacturersmaking 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 withoutamended 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. 

## 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 ofcommercial analyzed have many manufactm'ers floorspace 

### bybuilding ty-pe, 

### and making 

### a particularproduct, 

### a**fl1'1il-b~-** 

### projection ofenergy conslll11ption by firm analysis would be 

### a very expenSive end-use and fuel type. The important and notnecessarily cost-effective interaction between omerbuilding 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 ofthese limitations on savings fTom more efficient fluorescent data andresources, 

### 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'erImpactModels firm. 

### Therefore. a prototypical 

### f..rm is a 1. 

### Conceptual Approach hypothetical ft,rm representative.ofa portion ofthe mdustry. PrototyplCal

## Th~ manufacturer impact analysis firms are definedby parameters that are estimates the overall impact ofnew 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 ofthe industri they

2. 

### Measures ofImpact represent. Importantparameters 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 ofcomplying 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; andreturn-on-equity (ROE). Incr;ased levels ofstandards 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 investmentinduced primary measures 

### ofgrowth, and the by standards 

### is the purchase ofnew impact on competitiveness is analyzed plant and equipment. This costfirst 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 ofthe 

### 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 offunds. A...'1 additional. and segments ofthe 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 

### if standards resultin 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. LBLManufacturer Impact 0 

### e, Increased costs ofproduction 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 spreadsheetmodel, the Lawrence the marketplace demand ofthe product. Berkeley Laboratory Manufacturer Revenue is affected by both price and ImpactModel (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, bothin 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 ofstandards. A five- with the changes L'l 

### price and operating yearperiod is long enough to capture expenses resulting from the standards. any majorimpacts 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 ofa 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 thewith

### standards (orwith 

### 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 particularindustry andprotot;ypical firms within that indusfrlJ. EstLTfiates ofdata are based on informationfrom five general sources: 

### LEL business consultation groups; the Engineering Analysis; the Consumer Analysis, public financial data; and industry profiles.



### e. UtilityImpactModel

The utility 

### analysis serves several pu..."'P0ses within the overall assessment of

### ilie impact ofthe 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 ofchanges 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 impactmeasures the production
costs avoided by reduced electrical demands, valued at the marghral energy costs ofthe utility. 

### The capacity impact

measures the reliability value ofreduced loads dlli'"ing systempeakperiods, which is, by convention. valued at the cost ofa combustion turbine thatwould have beenneeded to meet the load. The analysis charapterizes these avoided
costs perkWh ofheating, COO!i.Jlg, 

### and baseload energy saved. l2 

### These values

are used to calculate societal benefits from reduced electricity conslL'!lption.

The Utility ImpactModel calculates avoided energy costs based on a . . disaaoregation ofthe 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 ofcalculating utility avoided costs, electric heating appliances are defined 88 electric heatpumps 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 

## 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 ofheating, 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 lloadfactors (CLFs) for the energy savings attributable to the standards, 

### as well as the capacity value ofa combustion turbine. A CLF 

### is defined 

### as 

### !the average hourly energy savings 

### ofa conservation measure divided by 

### its peak load savings. The CLFs are a way ofcharacterizing the peak demand savi.ngs ofa conservationmeaSUie. 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. 

### IfNERC 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 ofuse, as weH as electricity generation by fuel 

### type and capacity need by NERC region. The outputs ofth.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 permillion 

### Btu ofresource energy. 

### /. SensitivityAnalyses

Sensitivity studies are performed to· determine how changes in technical and operational parameters affect 

### key engineering and economic indicators used in evaluation ofappliance standards. This makes it possible to place limits on the. overall results ofthe 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 ofvariatio.n determined. The sensitivity ofthe model
to changes iIi the value ofeach importantparameter is then estimated by running the model for both the base

case and the standards cases. The results ofthe 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 ofalternative standards).

iV. Comments



### a. QuestionsforPublic 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 interestedin gathering data on the following:

.. Descriptive and performance characteristics for baseline models of 

### each product class that are the subject ofthis 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 otherproducts in thi.s rulemaking;

<> Costs 

### ofbaseline units and incremental costs 

### ofdesigns improving the energy efficiency ofthe products that are the subject ofthis rulemaking; Appropriateness ofexisting test procedures to the proposed design options;

.. Data on consumer financing of appliant"les useful for obtaining 

### a weighted average discount rate;

.. Estimates ofperformance and cosl 

### ofhorizontally rotatifl.g top loading clothes washers;

.. Appropriate method to incorporate 

### pool heaters into the 

### LBL-F.EJ.\II:

" Usage patterns in commercial applications offluorescent 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 waterheaters as a new class;

.

.. Impact on efficiency and cost of fluorescent lamp ballasts oflimiting harmonic content; 

### and

.. Heating efficiency ofvarious types 

### ofrange 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 ofthis analysis, small manufacturers' costs are assumed to equal those ofmedium manufacturers. DOE is especially interested in learning ofthe existence ofsuch manufacturers, and 

### in obtaining cost data 

### from sm.all ll11anufacturers 

### ofL1.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 consumerpi"ices and on the installation and maintenance expenses ofthese appliances are also requested

..

The manufacturer analysis needs the financial data from the product division Revel. All ofthese 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 ofthe divisloi!1':$ finances.



### An i.ncome statement and 

### ba1tmcre: sheet at the division level would be
most helpful. 

### Ifthis 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 ofgoods sold, interest. ia-..;es, 

### de!:Jtto-equity ratio, net depreciable <ISsets, net aszets, capital imrestment, mnd iong

### t",:rm debt.

DOE 

### also welcomes 

### cUl'l'ent aula 

### on 

### Il:mH sales 

### and revenues 

### for the industries as 

### a whole.



### b. CommentProcedure

interested persons are invited lO submit written comments to the address iI

..dicaied in the beginning ofiliis 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 

## 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 ofthe 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 ofthe information 

### and threat it accordiP.g to 

### its determination.

Factors ofinterest to DOE when evaluating requests to treat as confidential information thathas been submitted include: (1) A description of the item; (2) an indication as to whether 

### and why such items ofinformationhave been treated by the submitting pal't'Jas 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 ofthe competitive i.njury to the submitting
person which would result from public disclosure; (6) an indicationas to when such information might lose its confidential character due to the
passage oftime; and (7) whether disclosU1'e ofthe information would be in**~e** public interest.

Issued in Washington. DC. ell Sept.ember 19.1990. 

### J. Michael Davis, AssistantSecretary, Conservation oou1 i1enewableEnergy. 

### !.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 concerningthe computation and payment ofpremiums. The Corporation was established on January 6. 1988, the date ofenactment of the Agricultural CreditAct 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 outitsresponsibilities. 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 FarmCredit System banks. defmes certain terminology. prescribes the form and
content ofcertified statements, and establishes the date and place for filing certified statements and for payment of premiums.

DATES: Comments must be submitted on

or before October29. 1990.

ADDRESSES: Written comments may be mailed (in triplicate) to the Board of Directors, 

### farm Credit System Insurance Corporation. 1501 Farm CreditDrive. McLean, VA 22102-0826. Copies of

### all communications received wi!l be available for examination by interested parties in the offices ofthe Farm Credit SystemInsurance Corporation. 1501 Farm CreditDrive. Mclean, VA.

fOR FURTHER INFORMATION CONTACT: Bobbie Jean Norris, ProjectAnalyst.

Farm CreditSystem 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 of1987. Public Law 100-233, amended the Farm Credit Act of 1971 (Act) by adding provisions concerning the Farm Credit System Insurance Corporation (Corporation). One ofthe purposes for which the Corporation was established ill tu insure the timely payment ofprincipal and interest on notes. bonds, debentures. and other obligations issued under subsection (c) or (d) ofsection4.2 ofthe Act on behalfofone or more Farm

. Credit System banks (System banks),

, Effective January 6.1989, each System

bank participating in such obligations became an insured Systembank.

In order to provide the Corporation wih'1 funds to meetits obligations. the Actprovided for the transfer. as of January 6, 1989, ofall amounts in the revolving fund established

### by section 4.0 ofthe Act into the Farm Credit L'lsuranceFund (Insurance Fund). which served as the initial capital ofthe Corporation. The Actprovides for further funding ofthe Corporation to

come from premium payments by System banks. TheCorporationwill deposit in the Insurance P."mdaU premiumpayments recehrec:l from Systembanks. '

Premiums are to be paidheginning a8

soon as practicable afterJanuary 1,. 1990. andno less frequently than annually thereafter. Except for the premiumpayment which covers calenda:ryear 1989, section 5.55 ofthe Act requirils that the annual premium due from each System bankfor each calendaryear 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 guaranteedportions ofcertain 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 yearon the guaranteedportions 

### 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 guaranteedportions ofits _State government-guaranteed loans made by the bank that Bre in accrual
status. multiplied 

### by 0.0003. The premium payment for calendaryear 1989 is to be based on the annual
average principal outstanding on only the accruing loan volume.

Section 

### 5.55(0) ofthe 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 ofany bank. company, institution, corporation. union, or association described

### tTl section 1.7(b)(1)(B) ofthe Act (otherfinancing institution) that are able to be made because the direct lending association,

or otherfinancing institutionis recaiving. orhas received. funds provided through a System bank, as W'BU

as loans ofeachSystem bank otb,er than loans made to direct lending associations. and**ot~er** financing institutions.

Premiums shall continue to be paid accordingto this formula until such time

as the Insurance Fund exceeds the

secure base amount. The secure base
amountis defined in section 5.55(c) as two percent ofthe aggregate outstanding insured obligations of

### allinsured Syst{lID banks at any point in time (adjusted downward by a percentage ofthe guaranteedportions ofthe principal outstanding on State.andFederal governmentiluaranteed loans in accrual status). orsuch other amount as the Corporation, inits sole discretion. determines 'tobe actuarially sound. 

### If the amount

### in the Insurance Fund exceeds the secure base amount. the Corporation shalll'educethe arinual premiumdue from eachSy_stembank foJ!'