EXECUTIVE SUMMARY

TABLE OF CONTENTS

ES.1 OVERVIEW OF PRELIMINARY ACTIVITIES...............................................................1 ES.2 OVERVIEW OF THE PRELIMINARY NOTICE OF PROPOSED RULEMAKING ANALYSES AND THE PRELIMINARY TECHNICAL SUPPORT DOCUMENT ....................................................................................................3 ES.3 KEY RESULTS OF THE ANALYSIS ...............................................................................4 ES.3.1 Market and Technology Assessment .............................................................................4 ES.3.2 Screening Analysis...................................................................................................... ...6 ES.3.3 Engineering Analysis.................................................................................................... .6 ES.3.3.1 Product Classes Analyzed........................................................................ 7 ES.3.3.2 Manufacturing Cost Assessment.............................................................. 8 ES.3.4 Markups to Determine Product Price...........................................................................12 ES.3.5 Energy Use Characterization .......................................................................................13 ES.3.6 Life-Cycle Cost and Payback Period Analyses ...........................................................16 ES.3.7 Shipments Analysis...................................................................................................... 22 ES.3.8 National Impact Analysis.............................................................................................24 ES.3.8.1 National Energy Savings........................................................................ 24 ES.3.8.2 Net Present Value .................................................................................. 25 ES.3.9 Preliminary Manufacturer Impact Analysis.................................................................27 ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT..............................................28 ES.4.1 Design Options for Clothes Dryers and Room Air Conditioners ................................28 ES.4.2 Vent-less Clothes Dryers .............................................................................................28 ES.4.3 Underwriters Laboratory Fire Safety Regulation ........................................................28 ES.4.4 Extrapolation to Estimate Costs for Product Classes not Fully Analyzed...................28 ES.4.5 Modified Engineering Analysis Approach ..................................................................29 ES.4.6 Establishing Appropriate Size Limits for Room Air Conditioners with Louvered Sides.............................................................................................................29 ES.4.7 Operating Hours for Room Air Conditioners ..............................................................29 ES.4.8 Number of Annual Cycles for Clothes Dryers.............................................................29 ES.4.9 Consideration of Remaining Moisture Content of Clothes for Calculation of Clothes Dryer Energy Use ...........................................................................................29 ES.4.10 Load Sizes for Clothes Dryers .....................................................................................30 ES.4.11 Repair and Maintenance Costs.....................................................................................30 ES.4.12 Lifetime of Clothes Dryers and Room Air Conditioners.............................................30 ES.4.13 Base Case Efficiency Distributions .............................................................................30 ES.4.14 Manufacturer Subgroups..............................................................................................30 ES.4.15 Valuing Air-Borne Emission Reductions ....................................................................31

LIST OF TABLES Table ES.3.1 Product Classes for Residential Clothes Dryer Products.........................................5 Table ES.3.2 Product Classes for Room Air Conditioners............................................................5 Table ES.3.3 Baseline Residential Clothes Dryer IEF for Analyzed Product Classes..................7 ES-iTable ES.3.4 Baseline Room Air Conditioner IEER for Analyzed Product Classes ....................8 Table ES.3.5 Incremental Cost Results for Residential Clothes Dryer Product Class 1...............9 Table ES.3.6 Incremental Cost Results for Residential Clothes Dryer Product Class 2...............9 Table ES.3.7 Incremental Cost Results for Residential Clothes Dryer Product Class 3...............9 Table ES.3.8 Incremental Cost Results for Residential Clothes Dryer Product Class 4.............10 Table ES.3.9 Incremental Cost Results for Residential Clothes Dryer Product Class 5.............10 Table ES.3.10 Incremental Cost Results for Residential Clothes Dryer Product Class 6.............10 Table ES.3.11 Cost Results for Room Air Conditioner Product Class 1 ......................................11 Table ES.3.12 Cost Results for Room Air Conditioner Product Class 3 ......................................12 Table ES.3.13 Cost Results for Room Air Conditioner Product Class 5 ......................................12 Table ES.3.14 Cost Results for Room Air Conditioner Product Class 8 ......................................12 Table ES.3.15 Markups for Clothes Dryers and Room Air Conditioners.....................................13 Table ES.3.16 Vented Electric Standard and Gas Clothes Dryers: Average Annual Energy Consumption by Efficiency Level.............................................................14 Table ES.3.17 Vented Electric Compact Clothes Dryers: Average Annual Energy Consumption by Efficiency Level .........................................................................14 Table ES.3.18 Vent-less Electric Compact (240 V) Clothes Dryers and Vent-less Electric Combination Washer/Dryer: Average Annual Energy Consumption by Efficiency Level.....................................................................................................15 Table ES.3.19 Room Air Conditioner, Without Reverse Cycle, With Louvered Sides, <6,000 Btu/h: Average Annual Energy Use ..........................................................15 Table ES.3.20 Room Air Conditioner, Without Reverse Cycle, With Louvered Sides, 8,000-13,999 Btu/h: Average Annual Energy Use ................................................15 Table ES.3.21 Room Air Conditioner, Without Reverse Cycle, With Louvered Sides,20,000 Btu/h: Average Annual Energy Use ........................................................16 Table ES.3.22 Room Air Conditioner, Without Reverse Cycle, Without Louvered Sides, 8,000-13,999 Btu/h: Average Annual Energy Use ................................................16 Table ES.3.23 Vented Electric Standard Clothes Dryers: LCC and PBP Results.........................18 Table ES.3.24 Vented Gas Clothes Dryers: LCC and PBP Results ..............................................18 Table ES.3.25 Vented Electric Compact (120 V) Clothes Dryers: LCC and PBP Results...........19 Table ES.3.26 Vented Electric Compact (240 V) Clothes Dryers: LCC and PBP Results...........19 Table ES.3.27 Vent-less Electric Compact (240 V) Clothes Dryers: LCC and PBP Results....................................................................................................................20 Table ES.3.28 Vent-less Electric Combination Washer/Dryers: LCC and PBP Results ..............20 Table ES.3.29 Room Air Conditioners, <6,000 Btu/h, with Louvers: LCC and PBP Results....................................................................................................................20 Table ES.3.30 Room Air Conditioners, 8,000-13,999 Btu/h, with Louvers: LCC and PBP Results....................................................................................................................21Table ES.3.31 Room Air Conditioners, 20,000 Btu/h, with Louvers: LCC and PBP Results....................................................................................................................21 Table ES.3.32 Room Air Conditioners, 8,000-13,999 Btu/h, without Louvers: LCC and PBP Results............................................................................................................21 Table ES.3.33 Clothes Dryers: Cumulative NES Results (quads) ................................................25 Table ES.3.34 Room Air Conditioners: Cumulative NES Results (quads)...................................25 Table ES.3.35 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 3 Percent....................................................................................................................26 ES-iiTable ES.3.36 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 7 Percent....................................................................................................................26 Table ES.3.37 Room Air Conditioners: Cumulative Consumer Net Present Value, Discounted at 3 Percent .........................................................................................26 Table ES.3.38 Room Air Conditioners: Cumulative Consumer Net Present Value, Discounted at 7 Percent .........................................................................................27

LIST OF FIGURES Figure ES.1.1 Flow Diagram of Analyses for the Residential Clothes Dryers and Room Air Conditioners Rulemaking Process...............................................................ES-2 Figure ES.3.1 Forecasted Shipments for Clothes Dryers (Base Case) ...................................ES-23 Figure ES.3.2 Forecasted Shipments for Room Air Conditioners (Base Case)......................ES-23

ES-iiiEXECUTIVE SUMMARY

ES.1 OVERVIEW OF PRELIMINARY ACTIVITIES Section 6295(o)(3)(B) of 42 U.S.C. requires the U.S. Department of Energy (DOE) to establish energy conservation standards that are technologically feasible and economically justified, and would achieve the maximum improvement in energy efficiency. This executive summary summarizes the preliminary activities that DOE conducted in consideration of amended energy conservation standards for residential clothes dryers and room air conditioners. The executive summary describes the preliminary activities and summari zes key results from DOE’s preliminary analyses. Additiona lly, the executive summary delineates issues identified during the analyses about which DOE seeks comments from interested parties. These issues are highlighted in the public meeting presentation and are further discussed in chapter 2 of the preliminary technical support document (TSD). Figure ES.1.1 presents a summary of the analytical components of the standards-setting process and illustrates how key results are generated. The focal point of the figure is the center column, labeled “Analyses.” The columns labeled “Key Inputs” and “Key Outputs” show how the analyses fit into the process and how they relate to each other. Key inputs are the types of data and other information that the analyses require. Some key information is obtained from public databases; DOE collects other inputs from interested parties or persons having specialknowledge and expertise. Key outputs are analytical results that feed directly into the standardssetting process. The issues on which DOE seeks comment from intere sted parties derive from the key results that are generated by the pre-NOPR analyses. Arrows connecting analyses show the types of information that feed from one analysis to another.

ES-1Utility Impact Analysis

Notice of Proposed Rulemaking (NOPR)

Final Rule Market and Technology Assessment

Screening Analysis

Engineering Analysis

Markups for Product Price Determination Life-Cycle Cost and Payback Period Analysis

National Impact Analysis Energy Use

Revise Pre-NOPR Analyses
Life-Cycle Cost Sub-Group Analysis
Manufacturer Impact Analysis Shipments Analysis

Employment Impact Analysis

Revise Analyses • Product Classes • Technology Options

• Industry C ash Flow • Su b-Group Cash-Flow • Direct Employment Impacts • Compe titive Impacts • Cumulative Regulatory Burden • Cost-Efficie ncy R elat ionship

• Life -Cycle Costs • Pa yback Periods

• National Energ y Savings • Net Prese nt Values

• National Employm ent Im pacts

• Revised R esu lts • Market Se gmenta tion • Non-Regulatory Programs Framework Document

• Energy Prices • Installation C osts • Maintenan ce & Repair Costs

• Backcast an d Fo recast • Ma rket Saturation

• Stakeholder Com ments

• D emographics

• Emission Rat es • National Energy Savings

• Stakeholder Comm ents • Id entify Firms/Products • H istorical Shipments

• Manufacturer Prices • Average Co sts

• M anufacturer Financial Da ta D esign Options Pro duct Classes

Retail Prices D esign Ene rgy

Notice of Public Meeting (NOPM) • Efficie ncy/Perform ance • Ma nufacturing C ost

Candidate Standard

Leve ls

Environmental Assessment Regulatory Impact Analysis Technolo gy Op tions

• Em issio n Estima tes • Utilit y Lo ad Fa cto rs • Na tion al Ene rgy Savings

• Non -Reg ula tory Alternatives • Desig n Optio ns

• Ene rgy Price Fo recasts • Site-to-Sou rce Fa cto rs • Energy-Efficiency Levels

Direct Em plo ymen t Impacts
• National Energy Savings • National Product Costs • National Operating Costs • Utility Impacts • Life -Cycle Costs • Pa yback Periods • Installation Costs • Maint C osts • Rep air Costs • UEC • Energy Prices • Annu al En ergy Use (UEC)

Preliminary Manufacturer Impact Analysis • Manufa ctu rer Prices • Ave rage C osts • Conversion Capital E xpen ditures • Direct Emp loymen t Impacts

• National Energ y Savings • Net Presen t Values • Trial Standa rd Le vels (TSLs) TSLs • Product Prototypes

Energy-Efficie ncy Le vels

• Dep artm ent of Justice Revie w

Figure ES.1.1 Flow Diagram of Analyses for the Residential Clot hes Dryers and Room Air Conditioners Rulemaking Process

ES-2ES.2 OVERVIEW OF THE PRELIMINARY NOTICE OF PROPOSED RULEMAKING ANALYSES AND THE PRELIMINARY TECHNICAL SUPPORT DOCUMENT For the Pre-NOPR stage, DOE publishes a Pre-NOPR notice of public meeting (NOPM) in the Federal Register , which announces the availability of the preliminary technical support document, the date and place of the public meeting, and presentation materials interested parties may review before the public meeting. In addition, the NOPM highlights the major analyses DOE developed in the Pre-NOPR stag e. The preliminary TSD de scribes each preliminary analysis in detail, providing detailed descriptions of inputs, sources, methodologies, and results. Chapter 2 of the preliminary TSD provides an overview of each preliminary analysis, the comments received in response to the analytical approaches DOE described in the framework document, and DOE’s responses to those comments. The following chapters of the preliminary TSD address the analyses performed for the Pre-NOPR stage. Chapter 3 - The market and technology assessment (MTA) characterizes the relevant product markets and technology options, including prototype designs. Chapter 4 - The screening analysis reviews each technology option uncovered in the MTA to determine whether it is technologically feasible; is practicable to manufacture, install, and service; would adversely affect product utility or product availability; or would have adverse impacts on health and safety. Chapter 5 - The engineering analysis develops cost-efficiency relationships that show a manufacturer’s cost of achieving increased efficiency. Chapter 6 - The markup analysis estimates consumer product prices based on market structures, and the manufacturing costs developed in the engineering analysis. Chapter 7 - The energy use analysis determines the annual energy consumption of the products under consideration. Chapter 8 - The life-cycle cost (LCC) and paybac k period (PBP) analysis calculates, based on the usage patterns, installed cost, energy prices, etc. developed in prior chapters, the total ownership costs for the life of the appliance at various efficiency levels. Chapter 9 - The shipments analysis documents historic unit shipments and forecasts future shipments of products under consideration. Shipment patterns heavily influence industry revenue and the net present value (NPV) of the industry. Chapter 10 - The national impact analysis (NIA ) assesses the cumulative national energy savings (NES) from standards and the NPV of consumer costs and savings associated with standards at different efficiency levels. Chapter 12 - The preliminary manufacturer impact analysis (MIA ) assesses the potential impacts of energy conservation standards on manufacturers, such as effects on expenditures for capital conversion, marketing costs, shipments, and research and development costs.

ES-3The remaining chapters of thepreliminary TSD address the an alyses to be performed for the NOPR stage: Chapter 11 - The life-cycle cost analysis for subgroups evaluates the effects of energy conservation standards on various national subgroups of the population. Chapter 13 - A utility impact analysis examines impacts of energy conservation standards on the generation capacity of electric utilities. Chapter 14 - An employment impact analysis examines the effects of energy conservation standards on national employment. Chapter 15 - An environmentalassessment examines the effects of energy conservation standards on various airborne emissions. Chapter 16 - A regulatory impact analysis ex amines the national imp acts of non-regulatory alternatives to mandatory energy conservation standards.

ES.3 KEY RESULTS OF THE ANALYSIS The following sections describe analyses DOE performed in support of the TSD and present the key results.

ES.3.1 Market and Technology Assessment When initiating an analysis of potential ener gy conservation standards for appliance, DOE develops information for the products concerned on the present and past industry structure and market characteristics. This activity assesses industries and products both quantitatively and qualitatively, based on publicly available information. When evaluating and establishing energy conservation standards, DOE generally divides covered products into product classes by the type of energy used or by capacity or other performance-related features that affect effi ciency. Different energy conservation standards may apply to different product classes. (42 U.S.C. 6295(q)) Table ES.3.1 describes all of the product classes being considered for residential clothes dryers in this rulemaking, while Table ES.3.2 describes all the product classes being considered for room air conditioners. For residential clothes dryers, DOE plans to consider four product classes for vented dryers and two product classes for vent-less dryers, as shown in Table ES.3.1. This is a new analytical structure for clothes dryers, recognizing theunique utility that vent-less clothe s dryers offer to consumers. 1 Another new entry with unique utility is the combination washer/dryer ( i.e. , a device which washes and then dries clothes in the same basket/cavity in a combined cycle).

1 Previously, DOE has described vent-less dryers as condensing dryers. The new designation reflects the actual consumer utility ( i.e., no external vent required) and the market av ailability of vented dryers that also condense.

ES-4Table ES.3.1 Product Classes for Residential Clothes Dryer Products No. Product Class Vented dryers 1 Electric, Standard (4.4 cubic feet (ft 3 ) or greater capacity) 2 Electric, Compact (120 volts (V)) (less than 4.4 ft 3 capacity) 3 Electric, Compact (240 V) (less than 4.4 ft 3 capacity) 4 Gas Vent-less dryers 5 Electric, Compact (240 V) (less than 4.4 ft 3 capacity) 6 Electric, Combination Washer/Dryer
For room air conditioners, DOE is considering the same 16 product classes that are covered in the current Federal energy conservation standards.

Table ES.3.2 Product Classes for Room Air Conditioners

No. Product Class Without reverse cycle and with louvered sides 1 Less than 6,000 Btu/h 2 6,000 to 7,999 Btu/h 3 8,000 to 13,999 Btu/h 4 14,000 to 19,999 Btu/h 5 20,000 Btu/h or more Without reverse cycle and without louvered sides 6 Less than 6,000 Btu/h 7 6,000 to 7,999 Btu/h 8 8,000 to 13,999 Btu/h 9 14,000 to 19,999 Btu/h 10 20,000 Btu/h or more With reverse cycle 11 With louvered sides and less than 20,000 Btu/h 12 Without louvered sides and less than 14,000 Btu/h 13 With louvered sides and 20,000 Btu/h or more 14 Without louvered sides and 14,000 Btu/h or more Casement 15 Casement-Only 16 Casement-Slider
For both the residential clothes dryer and room air conditioner products that are the topic of this rulemaking, DOE addressed (1) manufacturer market share and characteristics, (2)

ES-5existing regulatory and non-regulatory initiatives for improving product efficiency, and (3) trends in product characteristics and retail markets. This information provided data and resource material throughout the analysis.

DOE reviewed literature and interviewed manufacturers to develop an overall understanding of the residential clothes dryer and room air conditioner industries in the United States. Industry publications, including trade journals, literature from manufacturers, government agencies, and trade organizations provided the bulk of the information, including (1) manufacturers and their market share; (2) shipments by product type; (3) product information; and (4) industry trends. Chapter 3 of the preliminary TSD describes the market analysis and resulting information. DOE typically uses information about existing and past technology options and prototype designs to determine which technologies and combinations of technologies manufacturers use to attain higher performance levels. In c onsultation with interested parties, DOE develops a list of technologies to be considered. The identified technologies initially include all those DOE believes are technologically feasible. DOE developed separate lists of technologically feasible technologies for residential clothes dryers and room air conditioners. The lists were developed from trade publications, technical papers, and manuf acturer literature and through consultation with manufacturers of components and systems. Because existing products contain many technologies for improving product efficiency, product literature and direct examination provided additional information.

ES.3.2 Screening Analysis The screening analysis (chapter 4) examines whether identified technologies (1) are technologically feasible; (2) are practicable to manufacture, install, and service; (3) have an adverse impact on product utility or availability; and/or (4) have a dverse impacts on health and safety. DOE develops an initial list of options for enhancing efficiency from the technologies that the technology assessment identified as feasible. In consultation with interested parties, DOE reviews the list to assess whether the technologies are practicable to manufacture, install, and service; would adversely affect product utility or availability; or would have adverse impacts on health and safety. In the subsequent engineering analysis, DOE further examines the technology options that it did not remove from consideration in the screening analysis.

ES.3.3 Engineering Analysis The engineering analysis (chapter 5) establishes the relationship between the costs of manufacturing residential clothes dryers and room air conditioners and their efficiencies. These relationships serve as the basis for calculating costs and benefits of modified product designs for consumers, manufacturers, and the nation. Chapter 5 describes the product classes DOE analyzed, the representative baseline units, the efficiency levels DOE considered, themethodology DOE used to develop the manufacturing production cost model, and the costefficiency results.

ES-6ES.3.3.1 Product Classes Analyzed DOE based its preliminary analysis for residential clothes dryers on the integrated energy factor (IEF) proposed as an alternative energy conservation metric in the clothes dryer and room air conditioner test procedure NOPR that DOE published on December 9, 2008 (December 2008 NOPR), 72 FR 74639, and is continuing to consider in a supplemental test procedure rulemaking. The IEF is defined as pounds of clothes load divided by the sum of energy use in active mode and energy use in standby mode per cycle. IE F levels were determined from the EF and standby energy use as discussed in chapter 5. The test procedure amendments proposed in the December 2008 NOPR do not alter the existing provisions for the measurement and calculation of EF. DOE conducted full analyses for all six product classes, representing essentially 100 percent of residential clothes dryers sold. Table ES.3.3 shows the IEF assumed for baseline products in the preliminary analysis.

Table ES.3.3 Baseline Residential Clothes Dryer IEF for Analyzed Product Classes

Product Class Baseline EF (pounds(lb)/kilowatthour (kWh)) Baseline Standby Power (watts (W)) Baseline IEF (lb/kWh) 1 3.01 2.0 2.96 2 3.13 2.0 3.01 3 2.90 2.0 2.79 4 2.67 2.0 2.63 5 2.37 2.0 2.30 6 1.95 2.0 1.90 DOE based its preliminary analysis for room air conditioners on the IEER integrated efficiency metric proposed as an alternative option in the December 2008 NOPR, and is continuing to consider in a supplemental test procedure rulemaking. The IEER is defined as the cooling capacity times annual hours of operation divided by the sum of energy use in active mode and energy use in standby mode. IEER levels were determined from the EER and standby energy use as discussed in chapter 5. The test procedure amendments proposed in the December 2008 NOPR do not alter the existing provisions for the measurement and calculation of EER. DOE conducted full analyses for four key product classes that represent roughly 75 percent of room air conditioner products sold. These included three product classes of louvered, non-reverse cycle room air conditioners, and one product class of non-louvered, non-reversecycle room air conditioners. The four product classes that served as the basis for the costefficiency analysis are shown in Table ES.3.4. Chapter 5 includes additional details on the representative product classes.

ES-7Table ES.3.4 Baseline Room Air Conditioner IEER for Analyzed Product Classes

Product Class Baseline EER (British Thermal Units (Btu)/hour(hr)-W) Baseline Standby Power (W) Baseline IEER (Btu/hr-W) 1 9.7 1.4 9.52 3 9.8 1.4 9.71 5 8.5 1.4 8.47 8 8.5 1.4 8.43

ES.3.3.2 Manufacturing Cost Assessment DOE typically uses data submitted by the Association of HomeAppliance Manufacturers (AHAM) as the primary source of cost information for the engineering analysis. AHAM provided DOE with aggregated incremental manufacturing co st data from its member companies for several product classes of vented clothes dryers. However, AHAM did not receive enough responses from members to allow aggregation and reporting of data for the remaining clothes dryer product classes and all room air conditioner product classes. For clothes dryers, DOE estimated the manufacturing costs associated with an increase in energy efficiency for each of the product classes analyzed. DOE conducted an independent review of the AHAM data using several methods and data sources. To gain a better understanding of the data submitted by member companies and to be able to relate the costs of improving efficiency to discrete (or system) technologies, DOE reviewed the TSD from the previous rulemaking and conducted interviews with clothes dryer manufacturers. DOE also performed detailed reverse-engineering, consisting of disassembling representative units, analyzing the materials and manufacturing processes, analyzing the design approaches manufacturers use, and developing a spreadsheet model to describe costs. DOE obtained input from interested parties on the manufacturing cost model inputs and results. Chapter 5 of the preliminary TSD includes information on the inputs used to determine the manufacturing cost, including material, labor, and overhead prices. Chapter 5 also includes information on the various components and features incorporated into designs for residential clothes dryers. DOE’s engineering analysis produced cost-effi ciency curves, based on IEF, for the six residential clothes dryer product classes, which were compared to the AHAM data for validation. The cost-efficiency curves are described by the efficiency levels DOE analyzed and the increase in manufacturer production cost (MPC) required to improve a baseline-efficiency product to each of the considered efficiency levels. Table ES.3.5 through Table ES.3.10 present the results of the engineering analysis for clothes dryers.

ES-8Table ES.3.5 Incremental Cost Results for Residential Clothes Dryer Product Class 1 Product Class 1: Vented Electric Standard Clothes Dryers

Efficiency Level IEF Incremental MPC (2008$) Baseline 2.96 – 1 3.04 $11.89 2 3.10 $63.56 3 3.33 $97.48 4 3.35 $98.78 5 3.40 $98.14 6 4.52 $259.13

Table ES.3.6 Incremental Cost Results for Residential Clothes Dryer Product Class 2 Product Class 2: Vented Electric Compact (120 V) Clothes Dryers

Efficiency Level IEF Incremental MPC (2008$) Baseline 3.00 – 1 3.08 $10.95 2 3.15 $63.37 3 3.37 $96.45 4 3.41 $97.75 5 3.53 $97.11 6 4.69 $246.35

Table ES.3.7 Incremental Cost Results for Residential Clothes Dryer Product Class 3 Product Class 3: Vented Electric Compact (240 V) Clothes Dryers

Efficiency Level IEF Incremental MPC (2008$) Baseline 2.79 – 1 2.86 $10.95 2 2.96 $63.37 3 3.06 $96.45 4 3.10 $97.75 5 3.19 $97.11 6 4.34 $246.35

ES-9Table ES.3.8 Incremental Cost Results for Residential Clothes Dryer Product Class 4 Product Class 4: Vented Gas Clothes Dryers

Efficiency Level IEF Incremental MPC (2008$) Baseline 2.63 – 1 2.71 $14.79 2 2.80 $65.36 3 2.97 $156.01 4 2.98 $157.31 5 3.02 $156.67

Table ES.3.9 Incremental Cost Results for Residential Clothes Dryer Product Class 5 Product Class 5: Vent-less Electric Compact (240 V) Clothes Dryers

Efficiency Level IEF Incremental MPC (2008$) Baseline 2.29 – 1 2.31 $1.30 2 2.37 $0.66 3 2.39 $13.01 4 2.59 $69.02 5 3.54 $216.37

Table ES.3.10 Incremental Cost Results for Residential Clothes Dryer Product Class 6 Product Class 6: Vent-less Electric Combination Washer/Dryers

Efficiency Level IEF Incremental MPC (2008$) Baseline 1.90 – 1 2.15 $0.81 2 2.34 $54.04 3 2.39 $55.34 4 2.42 $54.70 5 3.31 $230.83

DOE estimated the manuf acturing costs associated with an increase in energy efficiency for each of the room air conditioner product classes analyzed. The assessment method involved disassembling representative units, analyzing the materials and manufacturing processes, analyzing the design approaches manufacturers use, and developing a spreadsheet model to describe costs. DOE built a detaile d model for assessing manufacturing cost that estimates MPC. DOE also aggregated manufacturers’ costs to maintain confidentiality of th e data. DOE obtainedinput from interested parties on the manufacturing cost model inputs. In the absence of industrysupplied data, DOE conducted energy modeling analysis to de termine the efficiency gains from various product design options. Chapter 5 of the preliminary TSD includes information on the inputs used to determine the manufacturing cost, including material, labor, and overhead prices.

ES-10Chapter 5 also includes information on the energy modeling analysis and the various components and features incorporated into designs for room air conditioners. DOE’s engineering analysis produced cost-efficiency curves for the four representative room air conditioner product classes. The cost-efficiency curves are described by the efficiency levels DOE analyzed and the increase in MPC required to improve a baseline-efficiency product to each of the considered efficiency levels. DOE calculated the costs for each IEER level based on appropriate selection of active mode and standby mode design options. In cases where the IEER efficiency level does not coincide with the IEER determined for the designconfiguration directly analyzed with energy and manufacturing cost modeling, DOE took the following approach. If the next design option could be partially applied (such as increase in size of a heat exchanger), DOE interpolated between costs and IEER levels calculated for the nearest design configurations. If the next design option could not be partially a pplied (such as switch from a permanent-split capacitor (PSC) motor to a brushless direct current (DC) motor), the full cost of the next design option was applied. Table ES.3.11 through Table ES.3.14 present the key results of the engineering analysis for room air conditioners. The results presented for each IEER efficiency level are the incremental MPC and the total cost to ship the product to a U.S. port, since the vast majority of room air conditioners are produced overseas. The shipping cost was calculated to assure that shipping cost increases associated with an y product size increases are considered. The MPCs for the baseline efficiency level are non-zero because they reflect the calculated cost to maintain this efficiency level while converting to R-410A refrigerant.

Table ES.3.11 Cost Results for Room Air Conditioner Product Class 1 Product Class 1: Without Reverse Cycle, With Louvered Sides, < 6,000 Btu/h Efficiency Level IEER Incremental MPC Total Shipping Cost
Baseline 9.52 $7.65 $4.18 1 10.1 $12.18 $5.31 2 10.6 $18.22 $6.25 3 11.1 $27.19 $7.64 4 11.6 $37.30 $8.39 5 12.0 $44.10 $8.39

ES-11Table ES.3.12 Cost Results for Room Air Conditioner Product Class 3 Product Class 3: Without Reverse Cycle, With Louvered Sides, 8,000 - 13,999 Btu/h Efficiency Level IEER Incremental MPC Total Shipping Cost
Baseline 9.71 $10.39 $10.39 1 10.3 $18.11 $12.25 2 10.8 $25.68 $14.65 3 11.3 $40.51 $18.21 4 11.5 $78.59 $18.21

Table ES.3.13 Cost Results for Room Air Conditioner Product Class 5 Product Class 5: Without Reverse Cycle,

With Louvered Sides, 20,000 Btu/h Efficiency Level IEER Incremental MPC Total Shipping Cost Baseline 8.47 $23.78 $24.79 1 9.0 $37.47 $27.88 2 9.4 $52.84 $32.66 3 9.8 $75.30 $36.46 4 10.0 $104.34 $36.46

Table ES.3.14 Cost Results for Room Air Conditioner Product Class 8

Product Class 8: Without Reverse Cycle, Without Louvered Sides, 8,000 – 13,999 Btu/hr Efficiency Level IEER Incremental MPC Total Shipping Cost Baseline 8.43 $7.45 $12.26 1 8.9 $10.95 $12.26 2 9.3 $15.36 $12.26 3 9.8 $28.82 $12.26

ES.3.4 Markups to Determine Product Price The markups analysis (chapter 6) develops appropriate markups in the distribution chain to convert the estimates of manufacturer cost derived in the engineering analysis to consumer prices. In developing markups, DOE determined the distribution channels for residential clothes dryers and room air conditioners and the markup associated with each party in the distribution channel. Because an overwhelming majority of the considered products are sold through retail outlets, DOE estimated that all of the products are purchased by consumers from retail outlets. DOE developed separate markups for baseline products (baseline markups) and for the cost increase associated with improvements required to produce more-efficient products (incremental markups). DOE also added sales tax to the estimated retail prices. Table ES.3.15 summarizes the markups developed for clothes dryers and room air conditioners.

ES-12Table ES.3.15 Markups for Clothes Dryers and Room Air Conditioners Markup Baseline Incremental Manufacturer 1.26 Retailer 1.45 1.15 Sales Tax Clothes Dryers Room Air Conditioners 1.068 1.067

ES.3.5 Energy Use Characterization The energy use characterization provides the basis for estimating the energy savings from higher efficiency appliances used in the LCC and subsequent analyses. The DOE test procedure provides standardized results that can serve as th e basis for comparing the performance of different appliances used under the same conditions, but actual usage in the field may differ from usage estimated by the test procedure. To determine the variation in field energy use by products that would meet possible energy efficiency standards, DOE used data from the Energy Information Administration (EIA)’s 2005 Residential Energy Consumption Survey (

RECS ). RECS is a national sample survey of housing units that collects statistical information on the consumption of and expenditures for energy in housing units along with data on energy-related characteristics of the housing units and occupants. To determine the energy use patterns of room air conditioners in commercial applications, DOE used EIA’s 2003 Commercial Building Energy Consumption Survey( CBECS ) to develop a representative sample of commercial buildings that have room air conditioners. For both room air conditioners and clothes dryers, each sample was divided into sub-samples to match the product classes analyzed. For clothes dryers with a specific efficiency, the annual energy consumption depends on the annual number of cycles. DOE estimated the number of clothes dryer cycles per year for each sample home using data given by RECS on the number of laundry loads (clothes washer cycles) washed per week and the frequency of clothes dryer use. The calculated average is 285 cycles per year for electric standard clothes dryers and 271 cycles per year for gas standard clothes dryers. For a room air conditioner with a specific size and EER, the annual energy use depends on the annual hours of operation. For each considered room air conditioner capacity, DOE calculated the number of operating hours for each room air conditioner in the residential sample using the reported energy use for room air conditioning in the 2005 RECS along with estimates of the EER of the room air conditioner(s) in each samplehome. DOE based the latter on the reported age of the unit and historical data on shipment-weighted average EER. The estimated mean number of operating hours for the residential room air conditioner sample is 1,310 hr for the >6000 Btu/h product class, 678 hr for the 8,000 to 13,999 Btu /h product classes, and 394 hrfor the 20,000 Btu /h product class.

ES-13Table ES.3.16 through Table ES.3.18 show the results of the energy use analysis for the clothes dryer product classes at each considered energy efficiency level, and Table ES.3.19 through Table ES.3.22 show the results for the representative room air conditioner product classes at each considered energy efficiency level. Chapter 7 provides more details on the methods, data, and assumptions used for the energy use analysis.

Table ES.3.16 Vented Electric Standard and Gas Clothes Dryers: Average Annual Energy Consumption by Efficiency Level Electric Gas

Integrated Energy Factor (lb/kWh) kWh/year Integrated Energy Factor (lb/kWh) MMBtu/ year kWh/year

2.96 519 2.63 1.65 71.4 3.04 504 2.71 1.60 71.4 3.10 495 2.80 1.53 71.4 3.33 461 2.97 1.45 67.9 3.35 457 2.98 1.45 63.6 3.40 445 3.02 1.45 51.6 4.52 335 -- -- --

Table ES.3.17 Vented Electric Compact Clothes Dryers: Average Annual Energy Consumption by Efficiency Level 120V 240V Integrated Energy Factor (lb/kWh) kWh/year Integrated Energy Factor (lb/kWh) MMBtu/ year

3.00 270 2.79 290 3.08 263 2.86 283 3.15 258 2.96 274 3.37 241 3.06 265 3.41 237 3.10 260 3.53 225 3.19 248 4.69 169 4.34 183

ES-14Table ES.3.18 Vent-less Electric Compact (240 V) Clothes Dryers and Vent-less Electric Combination Washer/Dryer: Average Annual Energy Consumption by Efficiency Level Compact Vent-less Dryer (240V) Combination Washer-Dryer Integrated Energy Factor (lb/kWh) kWh/year Integrated Energy Factor (lb/kWh) kWh/year

2.29 351 1.90 424 2.31 347 2.15 375 2.37 335 2.34 344 2.39 332 2.36 340 2.59 307 2.42 328 3.54 224 3.31 239

Table ES.3.19 Room Air Conditioner, Without Reverse Cycle, With Louvered Sides, <6,000 Btu/h: Average Annual Energy Use Efficiency

(IEER) Residential (kWh) Commercial (kWh) 9.52 688 640 10.1 648 604 10.6 618 575 11.1 590 549 11.6 565 526 12.0 546 508

Table ES.3.20 Room Air Conditioner, Without Reverse Cycle, With Louvered Sides, 8,000-13,999 Btu/h: Average Annual Energy Use Efficiency

(IEER) Residential (kWh) Commercial (kWh) 9.71 672 1181 10.3 632 1110 10.8 602 1059 11.3 576 1012 11.5 566 994

ES-15Table ES.3.21 Room Air Conditioner, Without Reverse Cycle, With Louvered Sides,20,000 Btu/h: Average Annual Energy Use Efficiency

(IEER) Residential (kWh) Commercial (kWh) 8.47 1118 3343 9.0 1052 3146 9.4 1007 3012 9.8 966 2889 10.0 947 2832

Table ES.3.22 Room Air Conditioner, Without Reverse Cycle, Without Louvered Sides, 8,000-13,999 Btu/h: Average Annual Energy Use
Efficiency

(IEER) Residential (kWh) Commercial (kWh)

8.43 712 1359 8.9 673 1285 9.3 644 1230 9.8 611 1167

ES.3.6 Life-Cycle Cost and Payback Period Analyses Stipulating new energy conservation standards for products results in changes in consumer operating expenses—usually a decrease—and changes in consumer price—usually an increase. DOE analyzed the net effect of am ended standards on consumers by evaluating the LCC using the cost-efficiency relationship derived in the engineering analysis, as well as the energy costs derived from the energy use characterization. Inputs to the LCC calculation included the installed cost to the consumer (purchase price plus installation cost), operating costs (primarily energy expenses), the lifetime of the appliance, and a discount rate. Because the installed cost of a product typically increases while operating cost typicallydecreases in response to new standards, there is a time in the life of products having higher-thanbaseline efficiency when the ne t operating-cost benefit (in dollars ) since the time of purchase is equal to the incremental first cost of purchasing the higher e fficiency product. The length of time required for products to reach this cost-equivalence point is known as the payback period (PBP). DOE conducted the LCC and PBP analyses using values that reflect utilization of the products in the field. DOE identified several input values for estimating the LCC, including retail product prices, energy prices, product lifetimes, and discount rates.

ES-16For room air conditioners, DOE used utility tari ff data to develop monthly marginal electricity prices for each RECS household in the LCC sample. The marginal prices are calculated by taking account of the difference between the household’s electricity expenditures for the base-case electricity use and for a candi date standard level, in combination with the associated change in energy use. The price used is based on the standard (non-TOU) tariffs. DOE then applied the monthly prices to the estimated electricity use by the room air conditioner in each corresponding month. For clothes dryers, DOE used EIA’s energy price data to determine average annual residential prices of electricity and natural gas in 13 geographic areas. To estimate the future trends in energy prices, DOE used projections from EIA’s Annual Energy Outlook 2009( AEO 2009 ).

Because the basis for the life time estimates in the literature for clothes dryers and room air conditioners is uncertain, DOE use d actual data sources to estimate the distribution of clothes dryer and room air conditioner lifetimes in the field. By combining survey results from RECS and the U.S. Census’s American Housing Survey with the known history of appliance shipments, DOE estimated the fraction of appliances of a given age still in operation. The survival function, which DOE assumed has the form of a cumulative Weibull distribution, provides an average and median appliance lifetime. The analysis yielded an average lifetime for room air conditioners of approximately 10.5 years and for clothes dryers of approximately 16 years.

To estimate the share of consumers that would be affected by a standard at a particular efficiency level, DOE’s LCC and PBP analysis considered the projected distribution ( i.e. , market shares) of product efficiencies that consumers purchase under the base case ( i.e. , the case without new energy efficiency standards). DOE primarily relied on data submitted by AHAM to estimate the efficiency distributions in recent years for each of the product classes that were analyzed in the LCC and PBP analysis. DOE found that the data on recent trends in shipment-weighted average efficiency of room air conditioners and shares of ENERGY STAR products are inconclusive. Therefore, DOE assumed that the market shares of the efficiency levels in 2014 will be roughly the same as the shares in 2007. DOE also found little evidence that would suggest much change in the distribution of energy efficiencies of clothes dryers in coming years. Using the projected distribution of product efficiencies for each product class, DOE assigned a specific product efficiency to each sample household. If a household was assigned a product efficiency that is greater than or equal to the efficiency of the standard level under consideration, the LCC calculation would show that this household is not impacted by that standard level. Table ES.3.23 through Table ES.3.28 show the results of the LCC and PBP analyses for the clothes dryer product classes at each considered energy efficiency level, and Table ES.3.29 through Table ES.3.32 show the results for the representative room air conditioner product classes at each considered energy efficiency level. The tables for room air conditioners show the combined results for residential and commercial users. The average lifetime operating cost presented in the tables is a discounted value. Figures presented in chapter 8 show the range of LCC savings and PBPs for all of the efficiency levels considered for each product class.

ES-17Chapter 8 provides more details on the methods, data, and assumptions used for the LCC and PBP analyses.

Table ES.3.23 Vented Electric Standard Clothes Dryers: LCC and PBP Results

CSL Baseline 1 2 3 4 5 6 Efficiency lb/kWh

2.96 3.04 3.10 3.33 3.35 3.40 4.52 Life-Cycle Cost

Average Installed

Cost Average Lifetime Operating Cost Average LCC $552 $657 $1,209 $571 $638 $1,209 $651 $627 $1,277 $703 $584 $1,287 $705 $578 $1,284 $704 $563 $1,267 $953 $424 $1,377 Life-Cycle Cost Savings
Households with Average Savings Net Cost No Impact Net Benefit

$0 19% 70% 10% -$54 78% 21% 1% -$64 87% 0% 13% -$60 86% 0% 14% -$44 79% 0% 21% -$154 85% 0% 15% Payback Period (years)

Median Average

15.2 35.6 78.0 244.6 30.5 88.2 27.5 40.2 20.6 24.6 24.9 34.7

Table ES.3.24 Vented Gas Clothes Dryers: LCC and PBP Results

CSL Efficiency lb/kWh Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years) Average Installed Cost Average Lifetime Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit Baseline 2.63 $661 $353 $1,014 1 2.71 $684 $345 $1,029 -$4 25% 73% 2% 46.3 146.4 2 2.80 $762 $335 $1,098 -$52 70% 30% 0% 117.6 342.4 3 2.97 $903 $318 $1,220 -$174 99% 1% 0% 121.7 346.9 4 2.98 $905 $312 $1,216 -$170 99% 0% 1% 92.3 109.5 5 3.02 $904 $295 $1,199 -$152 98% 0% 2% 53.3 56.6

ES-18Table ES.3.25 Vented Electric Compact (120 V) Clothes Dryers: LCC and PBP Results

CSL Efficiency lb/kWh Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years)
Average Installed Cost Average Lifetime Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit Baseline 3.00 $553 $343 $896 1 3.08 $570 $334 $904 -$8 87% 0% 13% 28.7 74.4 2 3.15 $651 $327 $978 -$82 100% 0% 0% 95.5 247.3 3 3.37 $702 $306 $1,008 -$112 98% 0% 2% 61.1 158.0 4 3.41 $704 $300 $1,004 -$109 98% 0% 2% 51.8 66.5 5 3.53 $703 $285 $988 -$92 96% 0% 4% 35.4 38.1 6 4.69 $934 $215 $1,148 -$253 96% 0% 4% 43.0 52.8

Table ES.3.26 Vented Electric Compact (240 V) Clothes Dryers: LCC and PBP Results

CSL Efficiency lb/kWh Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years)
Average Installed Cost Average Lifetime Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit Baseline 2.79 $553 $368 $921 1 2.86 $570 $359 $929 -$3 34% 61% 5% 28.0 81.3 2 2.96 $651 $347 $998 -$57 77% 22% 1% 84.8 227.4 3 3.06 $702 $336 $1,038 -$88 77% 22% 1% 78.0 207.8 4 3.10 $704 $330 $1,034 -$84 78% 0% 22% 49.0 60.9 5 3.19 $703 $315 $1,018 -$68 76% 0% 24% 33.1 32.2 6 4.34 $934 $232 $1,166 -$216 95% 0% 5% 38.6 47.8

Table ES.3.27

ES-19Table ES.3.28 Vent-less Electric Compact (240 V) Clothes Dryers: LCC and PBP Results

CSL Efficiency lb/kWh Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years)
Average Installed Cost Average Lifetime Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit Baseline 2.29 $1,240 $446 $1,686 1 2.31 $1,242 $440 $1,683 $3 3% 0% 97% 4.7 4.5 2 2.37 $1,241 $425 $1,666 $20 0% 0% 100% 0.6 0.6 3 2.39 $1,260 $421 $1,682 $4 48% 0% 52% 10.4 10.2 4 2.59 $1,347 $389 $1,736 -$50 90% 0% 10% 25.6 27.5 5 3.54 $1,575 $284 $1,859 -$173 90% 0% 10% 30.2 38.7

Table ES.3.29 Vent-less Electric Combination Washer/Dryers: LCC and PBP Results

CSL Efficiency lb/kWh Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years) Average Installed

Cost Average Lifetime Operating Cost Average LCC Average Savings Households with

Median Average Net Cost No Impact Net Benefit Baseline 1.90 $1,582 $537 $2,119 1 2.15 $1,583 $476 $2,059 $60 1% 0% 99% 0.3 0.8 2 2.34 $1,665 $436 $2,102 $17 58% 0% 42% 12.6 32.7 3 2.36 $1,667 $432 $2,099 $20 56% 0% 44% 12.1 18.4 4 2.42 $1,666 $416 $2,083 $36 47% 0% 53% 10.1 12.3 5 3.31 $1,939 $304 $2,242 -$124 82% 0% 18% 22.6 30.9

Table ES.3.30 Room Air Conditioners, <6,000 Btu/h, with Louvers: LCC and PBP Results

CSL IEER Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years)
Average Installed

Cost Average Lifetime Operating Cost Average LCC Average Savings Users with

Median Average Net Cost No Impact Net Benefit Baseline 9.52 $329 $648 $976 1 10.1 $337 $613 $950 $26 15% 4% 81% 0.9 6.3 2 10.6 $347 $586 $933 $42 20% 4% 76% 1.6 11.6 3 11.1 $362 $561 $924 $51 30% 0% 70% 2.4 14.0 4 11.6 $379 $539 $917 $57 36% 0% 64% 3.1 17.1 5 12.0 $389 $522 $911 $63 38% 0% 62% 3.4 23.5

ES-20Table ES.3.31 Room Air Conditioners, 8,000-13,999 Btu/h, with Louvers: LCC and PBP Results

CSL IEER Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years)
Average Installed

Cost Average Lifetime Operating Cost Average LCC Average Savings Users with

Median Average Net Cost No Impact Net Benefit Baseline 9.71 $489 $655 $1,144 1 10.3 $502 $614 $1,117 $14 14% 49% 37% 1.6 10.4 2 10.8 $517 $584 $1,100 $23 17% 47% 36% 2.5 11.9 3 11.3 $543 $556 $1,099 $24 53% 3% 44% 6.7 33.1 4 11.5 $602 $546 $1,148 -$24 69% 1% 30% 11.2 79.1

Table ES.3.32 Room Air Conditioners, 20,000 Btu/h, with Louvers: LCC and PBP Results

CSL IEER Life-Cycle Cost Life -Cycle Cost Savings Payback Period (years)
Average Installed

Cost Average Lifetime Operating Cost Average LCC Average Savings Users with

Median Average Net Cost No Impact Net Benefit Baseline 8.47 $860 $1,255 $2,115 1 9.0 $884 $1,181 $2,065 $21 14% 63% 23% 3.2 7.3 2 9.4 $913 $1,131 $2,043 $33 21% 57% 23% 5.5 7.6 3 9.8 $951 $1,084 $2,035 $40 63% 1% 37% 11.8 14.5 4 10.0 $996 $1,062 $2,058 $17 71% 0% 29% 15.8 20.9

Table ES.3.33 Room Air Conditioners, 8,000-13,999 Btu/h, without Louvers: LCC and PBP Results

CSL IEER Life-Cycle Cost Life-Cycle Cost Savings Payback Period (years)
Average Installed

Cost Average Lifetime Operating Cost Average LCC Average Savings Users with

Median Average Net Cost No Impact Net Benefit Baseline 8.43 $557 $702 $1,259 1 8.9 $562 $661 $1,223 $14 3% 61% 36% 0.8 2.6 2 9.3 $569 $631 $1,200 $23 4% 61% 35% 1.1 3.7 3 9.8 $590 $596 $1,186 $37 39% 0% 61% 4.7 17.9

ES-21ES.3.7 Shipments Analysis Shipment forecasts are needed to calculate for each product being considered the national impacts of standards on energy use, NPV, and future manufacturer cash flows. DOE’s shipments models consider shipments for new homes, replacements and other types of purchases. Rather than simply extrapolating a current shipments trend, the analysis uses driver input variables to forecast sales in each market segment. For new housing units, annual product shipments are equal to the number of new housing units built times the purchase rate, which is determined by the market share of the product under consideration. To estimate shipments due to replacements, the models use shipments in previous years and assumptions about the product lifetime, which determine how long an appliance is like ly to remain in use. Chapter 9 of the TSD provides additional detail on theshipments analysis. Figure ES.3.1 and Figure ES.3.2 illustrate the forecasted base-case shipments by market segment for clothes dryers and room air conditioners, respectively, along with actual historic shipments. The leveling off of the trend forecasted for room air conditioners reflects the product reaching saturation of its eligible market.

ES-22Figure ES.3.1 Forecasted Shipments for Clothes Dryers (Base Case)

0 2 4 6 8 10 12

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040Millions

Shipments to Commercial Buildings New Purchases
RAC Replacements
Historical Shipments

Figure ES.3.2 Forecasted Shipments for Room Air Conditioners (Base Case)

ES-23ES.3.8 National Impact Analysis
The NIA estimates the fo llowing national impacts from possiblecandidate standard levels for residential clothes dryers and room air conditioners: (1) national energy savings (NES), (2) monetary value of the energy savings due to standards, (3) increased total installed costs of the considered products due to standards, and (4) the net present value (NPV) of energy savings (difference between value of energy savings and increased total installed costs). DOE prepared a spreadsheet model to forecast energy savings and national consumer economic costs and savings resulting from new standards. Incontrast to the LCC and payback period analyses, which use probability distributions for the inputs, the NIA uses average or typical values for inputs. A key component of DOE’s estimates of NES and NPV is the trend in energy efficiency forecasted for the base case (without new standards) and each of the standards cases (with new standards). For residential clothes dryers and room air conditioners, DOE did not forecast any change in the base-case efficiency distributions over the forecast period. For its determination of standards-case efficiency distributions, DOE used a “roll-up” scenario to establish the distribution of efficiencies for th e year that amended standards are assumed to become effective ( i.e. , 2014) and subsequent years. DOE assumed that product efficiencies in the base case that did not meet the standard level under consideration would “roll up” to meet the new standard level in 2014. For clothes dryers, DOE’s analysis focused on vented electric standard and vented gas products. For room air conditioners, DOE analyzed four product classes in detail throughout its analysis. For the NIA, DOE assigned each of the 16 product classes to one of four product categories, based on technology and efficiency considerations. Thus, the results refer to all 16 product classes. Chapter 10 provides additional details on this and other aspects of the NIA analysis.

ES.3.8.1 National Energy Savings DOE calculated annual NES as the difference between national energy consumption in the base case (without new efficiency standards) and under each candidate standard level (CSL). DOE estimated energy consumption and savings based on site energy and converted the site energy values to primary (source) energy using factors that account for losses in transmission and distribution and in electricity generation. Cumulative energy savings are the sum of the annual NES, which DOE determined over specified periods.

The NES results shown in Table ES.3.33 and Table ES.3.34 are cumulative to 2044 and are shown as primary energy savings (not discounted) in quads (quadrillion Btu’s).

ES-24Table ES.3.34 Clothes Dryers: Cumulative NES Results (quads) Product Class Candidate Standard Level 1 2 3 4 5 6 Vented Electric Standard 0.04 0.11 0.42 0.46 0.57 1.34 Vented Electric Compact 120V 0.00 0.00 0.00 0.00 0.00 0.00 Vented Electric Compact 240V 0.00 0.00 0.00 0.00 0.00 0.01 Vented Gas 0.01 0.02 0.06 0.07 0.10 Vent-less Electric Compact 240V 0.00 0.00 0.00 0.01 0.01 Vent-less Electric Combination Washer/Dryer 0.00 0.00 0.00 0.01 0.01

Table ES.3.35 Room Air Conditioners: Cumulative NES Results (quads)

Product Class* Candidate Standard Level 1 2 3 4 5 Group 1 - based on Less than 6,000 Btu/h, with Louvers 0.15 0.26 0.37 0.46 0.52
Group 2 - based on 8,000-13,999 Btu/h, with Louvers 0.16 0.29 0.49 0.64 Group 3 - based on 20,000 Btu/h or more, with Louvers 0.01 0.02 0.04 0.05 Group 4 - based on 8,000-13,999 Btu/h, with Louvers 0.02 0.03 0.07

* Group 1 consists of product class 1: Less than 6,000 Btu/h, Without Reverse Cycle and With Louvers Group 2 consists of product classes 2, 3, 4, 11, 16 and isbased on Product class 3: 8,000-13,999 Btu/h, Without Reverse Cycle and With Louvers Group 3 consists of product classes 5 and 12 and is based on product class 12: >20,000 Btu/h, Without Reverse Cycle and With Louvers Group 4 consists of product classes 6, 7, 8, 9, 10, 13,14 and 15 and is based on product class 8: 8,000-13,999 Btu/h, Without Reverse Cycle and Without Louvers

ES.3.8.2 Net Present Value DOE calculated net monetary savings each ye ar as the difference between total savings in operating costs and increases in total equipment costs in the base case and standards cases. DOE calculated savings over the life of the products purchased in the forecast period. The NPV is the difference between the present value of operating cost savings and the present value of increased total installed costs. DOE used discount rates of 7 percent and 3 percent to discount future costs and savings to the present. The NPV results by product class are shown in Table ES.3.35 through Table ES.3.38. A negative NPV indicates that the costs of a standard at a given efficiency level exceed the savings.

ES-25Table ES.3.36 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 3 Percent Product Class Candidate Standard Level 1 2 3 4 5 6 Billion 2008$ Vented Electric Standard 0.21 -6.83 -6.40 -5.76 -3.09 -10.66 Vented Electric Compact 120V 0.00 -0.02 -0.03 -0.03 -0.02 -0.05 Vented Electric Compact 240V 0.00 -0.07 -0.11 -0.10 -0.07 -0.20 Vented Gas -0.12 -1.85 -5.80 -5.62 -4.91 Vent-less Electric Compact 240V 0.00 0.02 0.01 0.08 -0.10 Vent-less Electric Combination Washer/Dryer 0.06 0.04 0.04 0.06 -0.05

Table ES.3.37 Clothes Dryers: Cumulative Consumer Net Present Value, Discounted at 7 Percent Product Class Candidate Standard Level 1 2 3 4 5 6 Billion 2008$ Vented Electric Standard -0.03 -4.26 -5.06 -4.83 -3.69 -10.60 Vented Electric Compact 120V 0.00 -0.01 -0.02 -0.02 -0.02 -0.03 Vented Electric Compact 240V 0.00 -0.04 -0.07 -0.06 -0.05 -0.14 Vented Gas -0.09 -1.13 -3.50 -3.43 -3.13 Vent-less Electric Compact 240V 0.00 0.01 0.00 0.02 -0.08 Vent-less Electric Combination Washer/Dryer 0.03 0.00 0.01 0.01 -0.06

Table ES.3.38 Room Air Conditioners: Cumulative Consumer Net Present Value, Discounted at 3 Percent Product Class Candidate Standard Level 1 2 3 4 5 Billion 2008$ Group 1 - based on Less than 6,000 Btu/h, with Louvers 1.54 2.52 3.09 3.47 3.83
Group 2 - based on 8,000- 13,999 Btu/h, with Louvers 1.43 2.37 2.60 -0.68

Group 3 - based on 20,000 Btu/h or more, with Louvers 0.10 0.16 0.21 0.09

Group 4 - based on 8,000- 13,999 Btu/h, with Louvers 0.22 -0.78 -0.54

ES-26Table ES.3.39 Room Air Conditioners: Cumulative Consumer Net Present Value, Discounted at 7 Percent Product Class Candidate Standard Level 1 2 3 4 5 Billion 2008$ Group 1 - based on Less than 6,000 Btu/h, with Louvers 0.68 1.08 1.27 1.35 1.46
Group 2 - based on 8,000- 13,999 Btu/h, with Louvers 0.59 0.95 0.78 -1.37

Group 3 - based on 20,000 Btu/h or more, with Louvers 0.04 0.06 0.06 -0.01

Group 4 - based on 8,000- 13,999 Btu/h, with Louvers 0.10 -0.38 -0.30

ES.3.9 Preliminary Manufacturer Impact Analysis The preliminary MIA focuses on manufacturers of residential clothes dryers and room air conditioners. Potential impacts include financial effects, both quantitative and qualitative, that might result from new energy conservation standards and consequently lead to changes in manufacturing practices for residential clothes dryers and room air conditioners. DOE identified potential impacts through interv iews with manufacturers and other interested parties. Chapter 12 of the preliminary TSD include s details on the key issues DOE identified during thepreliminary MIA. DOE identified the following key issue s for residential clothes dryers:

Cumulative regulatory burden;

Impact on product mix;

ENERGY STAR program;

Economic impacts;

Impact on profitability;

Product conversion costs; and

Product innovation. DOE identified the following key issues for room air conditioners:

Cumulative regulatory burden;

Impact on product mix / ENERGY STAR program;

Industry consolidation;

Impact on profitability;

Product conversion costs;

ES-27Product innovation; and

Impact on consumer subgroups. During the Pre-NOPR stage, DOE conducted the preliminary MIA by first identifying products, methods, and practices used in the residential clothes dryer and room air conditioner industries. Next, DOE determined how energy efficiency improvements affect cost, production, and various other manufacturing metrics. Finally, DOE interviewed manufacturers for feedback. DOE developed and distributed a questionnaire for use during the interviews. At the beginning of the interview process, DOE interviewed manufacturers and adjusted the analysis as appropriate, based on the feedback. In the interviews, DOE also examined any additional effects on competition, manufacturing capacity, direct employment, and the cumulative burden of other regulations affecting manufacturers, as well as several issues raised by individual manufacturers.

ES.4 ISSUES ON WHICH DOE SEEKS PUBLIC COMMENT DOE is interested in receiving comments on all as pects of this preliminary analysis. DOE especially invites comments or data to improve DOE’s analysis, including data or information that will respond to the following questions or concerns that were raised in response to the framework document and in preparation of the preliminary TSD.

ES.4.1 Design Options for Clothes Dryers and Room Air Conditioners DOE requests comment and data regarding additional design options or variants of the considered design options that can increase the range of considered efficiency improvements for both clothes dryers and room air conditioners, including design options that may not yet be found in the market.

ES.4.2 Vent-less Clothes Dryers The current DOE clothes dryer test procedure does not contain provisions for testing vent-less clothes dryers. DOE invites interested parties to submit inputs on potential clothes dryer test procedure amendments to test vent-less clothes dryers, as well as data and information on the energy efficiency performance of vent-less clothes dryers.

ES.4.3 Underwriters Laboratory Fire Safety Regulation Residential clothes dryer ma nufacturers must also comply with the Underwriters Laboratory (UL) fire containment regulation for clothes dryers. DOE seeks information from interested parties to further evaluate this issue in the NOPR analyses.

ES.4.4 Extrapolation to Estimate Costs for Product Classes not Fully Analyzed DOE developed estimates of incremental costs for room air conditioner product classes not fully analyzed by extrapolation methods described in chapter 5. DOE invites comment on the proposed extrapolation approach.

ES-28ES.4.5 Modified Engineeri ng Analysis Approach In the framework document, DOE proposed the use of an efficiency-level approach for the engineering analysis for room air conditioners . Use of this approach was complicated by the lack of aggregated industry data and by the phaseout of HCFC-22 refrigerant. As described in chapter 5, DOE adopted an approach relying more on a design-option analysis, using both energy modeling and manufacturing cost modeling to determine the impacts of efficiency improvements for the products. DOE invites comment on this modified approach for conducting the engineering analysis.

ES.4.6 Establishing Appropriate Size Limi ts for Room Air Condi tioners with Louvered Sides As described in chapter 5, DOE considered size increases for room air conditioners with louvered sides. DOE examined the range of sizes of available room air conditioners with baseline efficiencies and room air conditioners wi th increased efficiencies. The data show that even baseline efficiency products have a range of sizes. The DOE analysis generally considered two increases in size from a size at the low end of the range for each product class analyzed. Manufacturers have pointed out that consumer utility is negatively impacted by such size increases. However, a methodology for determining appropriate maximum sizes for different product classes and capacities has not been established. DOE seeks input on this topic, including, if possible, consumer surveys or similar data to guide establishing these maximum size limits.

ES.4.7 Operating Hours for Room Air Conditioners For each considered room air conditioner capacity, DOE calculated the number of operating hours for each room air conditioner in the residential sample using the reported energy use for room air conditioning in the 2005 RECS along with estimates of the EER of the room air conditioner(s) in each sample home. DOE based the latter on the reported age of the unit and historical data on shipment-weighted average EER. DOE invites comment on its approach.

ES.4.8 Number of Annual Cycles for Clothes Dryers For the LCC analysis, DOE estimated the number of clothes dryer cycles per year for each sample home using data given by RECS on the number of laundry loads (clothes washer cycles) washed per week and the frequency of clothes dryer use. DOE invites comment on its approach.

ES.4.9 Consideration of Remaining Moist ure Content of Clothes for Calculation of Clothes Dryer Energy Use To estimate the RMC of clothes washers in the future housing stock, DOE used a distribution of values for models listed in the Dec. 22, 2008 CEC directory. The RMC values range from 30 percent to 61 percent, with an average of 46 percent. DOE invites comment on this approach.

ES-29ES.4.10 Load Sizes for Clothes DryersThe DOE test procedure uses weights of 7 lb for standard-size units and 3 lb for compactsize units. For its LCC analysis, DOE developed a distribution of weights by matching the listed tub sizes for models in the CEC directory with the correlations between tub size and average pounds specified in the test procedure. DOE invites comment on this approach.

ES.4.11 Repair and Maintenance Costs DOE did not find any evidence that repair and maintenance costs change as product efficiency increases for room air conditioners and clothes dryers. DOE requests any specific information showing the extent to which repair and maintenance costs change as product efficiency increases beyond the baseline levels used in DOE’s analysis.

ES.4.12 Lifetime of Clothes Dryers and Room Air Conditioners DOE conducted an analysis of actual lifetime in the field using a combination of shipments data, the stock of the considered appliances, and responses in RECS on the age of the appliances in the homes. The data allowed DOE to estimate a survival function, which provides an average and a median appliance lifetime. This analysis yielde d an average lifetime for clothes dryers of approximately 16 years and for room air conditioners of approximately 10.5 years. DOE invites comment on its approach for estimating the lifetime of clothes dryers and room air conditioners.

ES.4.13 Base Case Efficiency Distributions
To estimate the share of consumers that would be affected by a standard at a particular efficiency level, DOE’s LCC and PBP analyses considered the projected distribution of product efficiencies that consumers woul d purchase in the base case ( i.e. , the case without amended energy efficiency standards). DOE found that the data on recent trends in shipment-weighted average efficiency of room air conditioners and shares of ENERGY STAR products are inconclusive. Therefore, DOE assumed that the market shares of the efficiency levels in 2014 will be roughly the same as the shares in 2007. DOE also believes that there is little evidence to expect much change in the distribution of ener gy efficiencies of clothes dryers in the base case. DOE invites comment on the approach used to forecast base-case market shares of the considered efficiency levels.

ES.4.14 Manufacturer Subgroups DOE research suggests that there are no residential clothes dryer manufacturers in the United States that are designated as small businesses by the U.S. Small Business Administration, and that there is at least one room air conditioner manufacturer that is a small business. DOE invites comment on its estimates of the number of small businesses who may be impacted by the rule and what those impacts might be.

ES-30ES.4.15 Valuing Air-Borne Emission Reductions DOE will conduct an environmental assessment as part of the next phase of the standards rulemaking, the NOPR. The primary environmental effects of energy conservation standards for the considered products are reduced power plant emissions resulting from reduced consumption of electricity. DOE will assess these environmental effects by using NEMS-BT along with key inputs from the NIA. NEMS-BT considers emissions of carbon dioxide (CO 2 ), sulfur dioxide (SO 2 ), nitrogen oxides (NO X), and mercury (Hg). DOE also plans on monetizing the emission reductions due to standards consistent with methods used in recent DOE standards rulemakings pertaining to other consumer products and commercial equipment. For example, in the case of CO 2 , DOE has used the most recent interagency estimates of the potential global benefits resulting from reduced CO 2 emissions, which range from $5 to $56 per metric ton of CO 2 (the unit values represent emissions that are valued in 2008$ for emissions that occur in 2007). . DOE invites comments on the approaches for monetizing the emissions reductions due to energy conservation standards.

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